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Looking Ahead: 2016 Technology Trends for Restaurants

It would be an understatement to say that a lot happened in the restaurant and hospitality industry in 2015. Between changes in wages, the intense discussion around tipping policies, implications of the Affordable Care Act, and the massive shift in the war for talent – we had plenty on our plates. Perhaps most of all, […]

It would be an understatement to say that a lot happened in the restaurant and hospitality industry in 2015. Between changes in wages, the intense discussion around tipping policies, implications of the Affordable Care Act, and the massive shift in the war for talent – we had plenty on our plates.

Perhaps most of all, we saw a continued shift in how restaurants view and use technology to power every aspect of their businesses.

This next year will surely not be without it’s own set of obstacles. But restaurants are getting better at understanding today’s competitive landscape and how they can use technology to fuel their success. And that’s a very good thing. Because the more complex the playing field gets, the harder it’s going to be to succeed amidst massive shifts in workforce and consumer preferences.

So what we can you expect in 2016? There’s a lot to get excited about. Here we take a look at what’s on the table from a technology standpoint.

Restaurants will be in the technology business as much as they are in the food business.

Scheduling, training, inventory, recruiting, loss prevention, ordering, loyalty programs, reporting – many restaurants already use technology to manage some of these processes. In 2016, technology will start to take over even more of them and operators will welcome the automation and accountability.

The next challenge, of course, will be finding ways to standardize the data across these systems so that decision makers can make sense of the information in a meaningful way that impacts the bottom line and improves overall productivity.

The Internet of Things will be on the minds of every CIO.

If you follow Nation’s Restaurant News or any other industry news outlet, you no doubt noticed the number of restaurants recruiting top minds in technology to their teams. The goal: successfully lead their company into the next generation, where technology is interconnected and ultimately powers predictable success across every department, every store and each employee.

Thanks to cloud platforms like HotSchedules IoT Platform , the POS is no longer going to be the center of the restaurant’s operations. Instead, integrations across a restaurant’s third party vendors will become easier and data will be pulled in through the the cloud platform. Not only that, these big data platforms are democratizing the data and the systems so that even smaller restaurant organizations can benefit from Big Data.

Big Data and predictability will be the nectar for better performance.

Speaking of Big Data … it may be a new term for the a lot of restaurant owners and managers, but the actual information behind the term has been used by restaurants for years on both a small and large scale.

In 2016 and beyond, restaurants will find new applications (built quickly and cheaply on cloud platforms) and new ways to map data from hardware, software, sensors and devices and use it to automate operations and better predict business outcomes.

For example, HotSchedules Reveal , an analytics application built on the IoT Platform, delivers immediate, as-it’s-happening visibility into store operations with real-time KPIs – on a mobile device.

So if you’re trying to figure out if it’s worth opening the patio this evening, you can easily see how the extra labor, inventory, weather and social media reviews will affect your decision.

Recruiting will become even more social.

The battle for talent hasn’t slowed down and companies across every segment and size will continue to look for alternative ways to source talent. Problem is, those traditional methods, like job boards, aren’t working. At a minimum they’re getting candidate through the door, but a whopping 80% of job board hires turnover within a year. Which is why human resource departments are looking at new angles to get the right people in the door and keep them there.

In the same way LinkedIn changed the playing field for candidates and recruiters in the traditional corporate world; network-based referral and social apps like HotSchedules Recruit will help managers and corporate franchises use their already engaged network of employees to find other candidates that fit company culture and want to stick around.

“In 2016 and beyond, restaurants will find new applications (built quickly and cheaply on cloud platforms) and new ways to map data from hardware, software, sensors and devices and use it to automate operations and better predict business outcomes.”

Restaurants will come up with new benefits to attract and retain hard working employees.

The big guys – aka Starbucks and Chipotle Mexican Grill Inc. – are already working hard to improve employee benefits in a bid to attract and retain top talent. In 2014, Starbucks announced it would offer full tuition coverage to employees who work toward an online undergraduate degree from Arizona State University. Recently, they expanded that program to offer free tuition to a veteran or active-duty member of the military, their spouse or one of their children. Chipotle Mexican Grill Inc. expanded benefits like tuition reimbursement, paid vacation and sick pay – to all employees, not just salaried.

Over the next year, others will follow suit with improved benefits for those employees looking for long-term opportunities.

While some of these benefits will be rolled out to every employee, others will be awarded based on performance – which will need to be managed and tracked through online training or elearning software systems like HotSchedules Train .

Gamified training won’t just be trendy.

Nearly 89% of learners said they would be more engaged in an elearning application if it had a point or badge system. Which isn’t all that surprising of a stat when you consider the Millennial workforce’s main mode of media consumption and communication is their smartphone.

“Building self-esteem and reinforcing it with peer recognition is a powerful means of unlocking motivation,” says Gartner consultant Brian Burke. Restaurants are already tapping into the social, elearning trend with tools. What they’ll get even better at in 2016 is using these systems – which can span across one, two, or 20,000 locations – to engage their employees in some healthy competition.

Imagine, instead of having to force feed incentives to servers to sell a flatlined menu item, a couple of managers decided to hold a contest across stores with a prize at the end of the month? Not only are you engaging employees to go out and learn about the menu item (hello better test scores!) you’re making what would normally be a hard-to-sell message, dare we say it, fun!

We’d be missing a beat if we didn’t cover a couple of topics, that while not completely tech-focused, will impact the industry and how restaurants use technology to combat workforce-related challenges.

The great tipping debate will wage on.

Restaurateurs like Danny Meyer and CEO Ray Blanchette of Ignite Restaurant group as well as large corporate organizations like Joe’s Crab Shack deserve, at a minimum, a clap on the back for trailblazing a new idea to compensate their staff.

At the same time, there’s no telling whether that trail will continue to blaze or if it will fizzle out in favor of traditional tipping methods or something else altogether. Their restaurants have already garnered the attention of the industry and consumers alike. At this point, it’s merely a matter of time before we truly understand the implications on recruiting, retention, performance, revenue and growth.

Our takeaway? It’s a new model worth exploring and our hats go off to anyone able to keep their business growing and improve the work lives of their employees.

Wages will continue to be a center-of-the-plate topic.

Wages are and will continue to be the most hotly debated topic facing the industry and to some extend the US economy today. There’s a lot to say about this topic – and we could spend weeks debating the various points. Suffice to say there are two opposing sides. On one side is the workforce seeking out better compensation. And then there are the operators, who continue to deal with shrinking profit margins thanks to among many things, increasing food costs.

The National Restaurant Association has taken an official stance on the topic (and on tipping policies too) in favor of operators. But a lot remains to be seen. The bottom line is that as State legislatures vote and minimum wages rise, operators will have to find alternative ways to protect their profit margins. That could mean better scheduling systems that help managers keep overtime within a predictable threshold. Or reducing food waste and human error with better inventory applications. Even avoiding penalties related to the Affordable Care Act could put thousands of dollars back in an operator’s pocket every year.

A HotSchedules customer recently told us that he was able to give his employees (across all 13 locations) $11 an hour “because we saved so much and wanted to give back to the employees to help with retention.”

And this is really what you can start to expect from technology in 2016. Scheduling software will be used to balance out wage increases. Training software will help managers sell more of the right menu items and keep great employees engaged. Increases in food costs won’t hurt so much because there’s less food waste in the kitchen thanks to better inventory apps .

This next year is going to bring about a lot of good change in the way restaurants use technology and as a software company built by restaurateurs, for restaurateurs – we couldn’t be more excited to be a part of this continued transformation.

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