COUNTERING RISING LABOR COSTS WITH RESTAURANT TECHNOLOGIES

With growing talk and planned changes around the minimum wage increase over the next few years comes growing talk and planned changes from major chain restaurants who can afford to do something about it now. The latest industry news to come out around this revolves around Wendy’s, who announced a move to self-service kiosks by the end of 2016. Wendy’s released the following statement to clarify what to expect:

“The majority of Wendy’s restaurants are franchise-operated. We are in pilot now with self-service order kiosks, which we expect to make available for installation by our franchisees later in 2016. Whether they choose to do so will be up to them. Earlier news reports were not quite accurate. We did not say kiosks would be available at every restaurant by end of year. We do continue to invest in technology to help mitigate the inflation we are seeing on the wage front.”

For franchisees with major corporate structures behind them, the implementation of sweeping changes to the FOH and customer-facing processes is doable. While Wendy’s may make the stipulation that it’s up to the franchisees to decide whether or not they want to make use of the kiosks, the reality is that, if presented with an easy way to lower restaurant labor costs, they’re most likely going to take advantage of it.

But what happens to the restaurants and franchisees who don’t have those sort of resources available? And, more importantly, what happens to the ones who can’t bring that new technology in-house without interrupting restaurant operations through new processes and tools? Restaurant menu prices could be increased. And staff could be cut. But both of those extreme options would result either in guests taking their business elsewhere because they don’t want to spend more money or in overworked staff leaving for another job that doesn’t force them to compensate for skeleton crews.

Is There Another Option?

Yes, there is.

Consistency and predictability are both important to the restaurant industry. If you can’t predict what’s going to happen from shift to shift and if you can’t expect consistent delivery and results from restaurant to restaurant, you’re in trouble. So for those of you who don’t have the ability to quickly reorganize your business structure, change up all your processes (including operations management), and expect customers to not notice much except for some cool self-service kiosks, there is another solution.

Restaurant technologies can come in many forms: online reservation systems, tablets for tableside order-taking, kitchen inventory digital checklists, automated temperature controls, online training systemspaperless HR forms, and operations management software are just some examples.

The solution to rising labor costs doesn’t necessarily mean you need to fire the now too expensive employee and replace them with self-service machines. Using cloud-based software and technologies can lead to a number of benefits for your customer, your employee, as well as your operations management. Benefits like:

A Balanced Solution

Labor costs are going to get higher, there’s no fighting that. Integrating more technologies into your operations is definitely going to be part of the solution to countering the negative effects from the rising costs. However, it’s about finding the technology that will work the best for your restaurant and then striking a balance with any other major changes that need to be made to menu prices, staffing, processes, or tools.

Minimum wage changes aren’t set to go into full effect for a while, so there is still time to assess the situation and get your restaurant prepared for the rise in labor costs. If you want some assistance, gaining better control over your operations management and HR is a good place to start—and we can help with that. Give us a call or fill out the form here to get the conversation started.

About the Author:

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Better Chains is simplifying the hospitality industry with our restaurant management software designed by industry professionals to increase your profit and growth. Use our modules separately or together on any mobile device or tablet throughout the day. We are here to bring much needed change to an industry we love.

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