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New Tech Efforts Revolutionizing Restaurant Labor

This article originally appeared on Nation’s Restaurant News Steve Jackson, the CEO of 560-unit pizza chain Hungry Howie’s Pizza, admits he was a latecomer to the technology revolution enveloping the business, especially in the pizza segment. It was still a lot easier to pick up a phone than it was to boot up a computer, […]

This article originally appeared on Nation’s Restaurant News

Steve Jackson, the CEO of 560-unit pizza chain Hungry Howie’s Pizza, admits he was a latecomer to the technology revolution enveloping the business, especially in the pizza segment. It was still a lot easier to pick up a phone than it was to boot up a computer, after all, he had told himself.

But he got on board six years ago when his Madison Heights, Mich.-based chain added online ordering, and then extended ordering options to its mobile app.

Since then, mobile ordering at Hungry Howie’s has soared by about 30 to 40 percent per year, and the efforts are taking sales along for the ride. So far this year, same-store sales are up more than 10 percent.

What’s more: The business is more efficient. A person submitting an order online isn’t taking up an employee’s time over the phone.

“Technology has become a very big part of our business,” Jackson said. “Sometimes I wonder whether we’re in the technology business more than the pizza business.”

Restaurants are in a technological arms race, adding mobile apps, online functionality, social and digital media capabilities and plenty back-of-house applications, all in the name of updating business models.

Many of these efforts are revolutionizing restaurant labor. Tools are enabling owners to improve operations, reduce labor costs and even keep from running afoul of government regulators and litigious customers.

The efforts can free up managers and staff to focus on customers, which is a must in an intensely competitive business.

Driving efficiencies

The move by Chili’s Grill & Bar to overhaul its restaurants’ kitchens in 2011 has enabled the chain to expand its menu, which has helped drive sales. But it has also improved efficiency within the kitchens, helping Chili’s and its franchisees improve profits.

Tabletop tablet technology added by many chains, including Chili’s, Applebee’s and this year across many brands at Darden Restaurants, is in part designed to improve wait staff efficiency. Because customers can order their own drinks, appetizers, desserts and pay their own bills using the tablet, speed of service improves, and wait staff can handle more tables.

The rapid development of mobile applications, meanwhile, is also being done in part to make employees more efficient, enabling customers to choose their meals on their phone or pay with the touch of a button.

“If a store takes 100 orders online and the average phone call takes one and a half
minutes, do the math,” Jackson said of Hungry Howie’s efforts.

He said the company hasn’t reduced the number of workers in stores or the number of hours. But staff is now freed to handle other items. They can also answer the phone calls that do come in, reducing the number of hang-ups when people are placed on hold.

Reducing costs

Technology-centered efforts in the restaurant industry are coming at a time when businesses are increasingly pressured on the labor front – typically the second highest cost center behind food costs. By 2016, for instance, 15 states will have minimum wage rates of at least $9 per hour, and many will have rates of at least $10. Cities like Seattle, Los Angeles, Chicago and New York have pushed, or are pushing, minimum wage pay even higher than that.

General macro-economic labor pressures are also hitting restaurants. The industry hired more than 150,000 people between December and February, according to federal data. That’s the highest three-month rate of hiring in the industry’s recorded history. Such hiring puts pressure on restaurants to increase wages and benefits to recruit and retain top talent.

And there are social pressures as well, with protests and union efforts aimed at pressuring minimum wage rates at restaurants and retail businesses as high as $15. McDonald’s Corp., one of the top targets of these protests, stepped into the ring by offering to raise pay at corporate stores to $1 an hour above local minimum wage rates. While that’s only about 1,500 locations, it nevertheless could help establish a market price for quick-service employees. Walmart, Target and other retailers are raising pay, too.

Together, all of this makes efficient labor more important. That makes scheduling software programs increasingly popular in the restaurant business.

HotSchedules, a software based labor management solution for restaurants and retail, can help enable restaurants to manage employees’ hours effectively, ensuring that locations are properly staffed based on historical data for a particular day and time. This helps employees with easier shift trades, so workers who want to trade a shift can do so without asking around for someone to cover for them. It also helps restaurants monitor worker hours so they’re not going over 30 hours a week – it lets the company run afoul of rules classifying such workers as full-time, and thus eligible for health benefits.

The platform can help with overtime, automating whether workers are in danger of overtime and enabling managers to cut hours earlier in the week, so they’re not sent home on a Saturday night.

David Cantu, the company’s chief revenue officer, said the system doesn’t just help drive efficiency and trim costs, but also helps improve sales because employees are focused on the guest, improving experience and customer service.

He said that sales-challenged restaurants could shift staff from the back of the house to the front of the house to focus on service and improve sales.

“This provides visibility not just to managers, but to leadership ,” Cantu said. “They can focus on keeping customers happy.”

While technology adoption is important because customers expect it, workers want it, too.

“It’s just a sign of things to come,” Cantu said. He noted that the HotSchedules app is downloaded between 25,000 to 30,000 times a month, and that 72 percent of system log-ins come through that app.

“This provides visibility not just to managers, but to leadership ,” Cantu said. “They can focus on keeping customers happy.”

Read the full article here: http://nrn.com/consumer-trends/new-tech-efforts-revolutionizing-restaurant-labor?page=2

Contact Jonathan Maze at jonathan.maze@penton.com.
Follow him on Twitter at @jonathanmaze

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