Putting a Finger on Labor Management

| January 01, 2005

News and analysis
The lodging and foodservice industries have long been key drivers for the U.S. labor market. Now in this era of the so-called "jobless recovery" the foodservice and lodging industries seem to be leading the charge toward a less labor intensive, more employee-centric workforce.

Faced by dramatic pressure to reduce costs, the lodging industry has moved aggressively to reduce staff levels and function more efficiently. According to the latest analysis from PriceWaterhouseCooper, in 2004 the lodging industry as a whole needed only 61.2 employees per 100 occupied rooms, well below the historic average of 68.5 and the recent peak of 68.9 in 2001. While part of the trend can be tied to the growth of the limited service segment in recent years, the implementation of a variety of technology solutions has also played a role.

The renewed focus on labor and workforce management should come as no surprise. Decreasing unemployment (albeit slowly) and a spate of minimum wage laws around the country are helping to push up wages and labor costs. As a result, more and more restaurants have put employee satisfaction and retention at a premium.

Self-service HR
White Castle, for example, recently rolled out self-service kiosks at its 400 restaurants, not for guest satisfaction or guest ordering, but easy access to human resource materials for its 13,000 employees. The system includes an innovative biometric fingerprint identification system from DigitalPersona (digitalpersona.com) for an instant and secure digital signature.

"We wanted to eliminate as many paper forms as possible," explains Don Long, director of IT. "We've been able to cut out weeks of manual processing by eliminating the paperwork and streamlining the enrollment process, which translates to a direct reduction in our payroll costs."
As Long notes, White Castle employees have really embraced the new system. "We thought we would have more problems than we did," he adds. The system authenticates White Castle employees, but does not store the actual fingerprint image, mitigating most security concerns.

Putting the focus on scheduling
Of course, most hospitality operators focus on employees by developing new labor management solutions. California Pizza Kitchen recently implemented eRestaurant Services (erestaurantservices.com) Back Office Suite in more than 140 company restaurants. California Pizza Kitchen will utilize food-cost management and labor-cost management modules in the web-based back-office suite. The labor module provides HR, time keeping, and scheduling functions to ensure optimal labor utilization.

Reducing the amount of time restaurant managers spend on scheduling was a key consideration when Bertucci's decided to implement the TMx 5.0 Labor Management System (timemangmt.com) to all of its 91 locations. After piloting the solution and determining the ideal configuration specifics, Bertucci's now uses TMx for labor forecasting and keeping close control on labor costs.

"For my IT team, the Web-based solution provides a huge lever to reduce the total cost of ownership for an information technology solution," states Jim Lux, vice president, information technology at Bertucci's Brick Oven Ristorante. "For the operators, TMx provides huge leverage to implement enterprise-wide best practices using well-defined labor standards that can be easily refined as we learn more."

Improving scheduling also drove Five Points Deli owner Richard Lane to implement Lathem's ShiftPlan EZ (lathem.com), an automated employee scheduling program that integrates with Lathem PayClock. "ShiftPlan has saved my company $45,000 a year," Lane says. "It's easy to use and creates schedules that are cost-efficient and fair."

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