Like many state and local governments, Hawaii has pushed the minimum hourly wage up above the federal rate of $7.25. The Aloha State’s minimum wage is currently $7.75 per hour, and will be growing to $10.10 per hour over the next several years.
That means restaurants like Monkeypod Kitchen will have to keep an even more watchful eye on labor costs, says Christie Snopko, human resources director at the restaurant, which has locations on Oahu and Maui.
“Most of our staff is minimum wage because we’re in the service industry,” she says. “That is quite a big jump from $7.75, so it will be increasingly important to make sure we’re hitting our budgeted labor figures.”
Employing sophisticated scheduling technology that allows tracking of sales, labor costs, and overtime issues can help restaurants meet the increased minimum wage pressures—as well as new overtime and on-call regulations, and the mandates of the Affordable Care Act.
Monkeypod Kitchen uses HotSchedules, a system that provides overtime alerts and tracks real-time labor costs, plus allows employees to access their own schedules via an app, which Snopko says makes changing schedules much easier than on paper.
“Schedule fluctuations can be a little bit hard to keep track of. On the weekends there could be close to 70 or 80 people on staff. When you have people calling you all day, being able to keep track of all those changes can be burdensome,” she says. “This is much more straightforward.”
Systems like HotSchedules allow restaurants to trim payroll dollars by keeping employees from clocking in early or clocking out late for their shifts. For instance, Monkeypod Kitchen only allows employees a five-minute window to clock in surrounding their scheduled shift: two minutes before their scheduled clock-in time and up to three minutes after. Anyone trying to clock in outside that window must seek a manager’s approval.
“If everybody’s clocking in 20 minutes early over a month or two, the costs can go up pretty significantly,” says Anthony Lye, the CEO of HotSchedules. “There’s a lot of structure and discipline needed that I think most restaurants haven’t had, largely because they haven’t had a good technology platform to deliver it.”
Lye says restaurants, facing increased competition for workers, have started to give more flexibility to employees, allowing them to easily make schedule changes themselves, and there’s more collaboration between management and the front line, as evidenced by programs like HotSchedules.
“A few years ago that was unheard of,” Lye says. “Now restaurants realize if they give the workforce more flexibility, they get a more willing employee and an employee who will stay longer.”
Similarly, Beef ‘O’Brady’s COO Joe Uhl acknowledges trying to produce smart schedules without technology is nearly impossible. Yet, many of the chain’s franchisees still don’t use the company’s RTI labor-tracking software.
“The hard part is getting people to use it and understand it. It’s not about whether you’re overspending on labor. It’s whether you’re putting labor in the right place at the right time,” Uhl says. “It’s tough to do that. That’s why you need a system to schedule people. Just sitting down and trying to create it is mind-boggling.”
In addition to software, Uhl thinks hardware may provide some relief from labor costs. The 250-unit chain is exploring tabletop tablets for customer ordering, which Uhl says could help offset wage pressures. And more sophisticated—albeit higher-priced—cooking equipment may help expedite things in the kitchen with more automation.
“Maybe instead of having three cooks, we can get by with two because of the technology,” he says. “And you can train them faster because of the technology.”
Thinking strategically and logically is also useful, as Brian Sill, president and co-founder of Deterministics, points out: There are several fairly common ways that restaurants blow labor budgets. Too often, he notes, restaurants schedule too many staff—whether it’s prep cooks or servers—to arrive too early, far beyond the hours of peak demand. And many managers don’t think about sending staff home until the peak has subsided.
“You need to make the phasing decisions during the peak,” he says. “It’s much too late to make them after the peak is over, when everybody has one or two tables left.”
Deterministics’ Intelligence Labor System analyzes labor costs by 15-minute increments. The system uses historical sales figures, taking into account prep times, promotional menu items, and demand across different periods of service.
“When you start looking at that level, you’d be amazed at how incrementally you can make changes,” Sill says. “Just do the math: If you save four or five 15-minute increments, that’s a little over an hour per shift, multiplied times two shifts, seven days a week, 52 weeks a year. It can be pretty significant.”
But using complex software to track labor costs doesn’t mean restaurants have to squeeze the schedule to the point of sacrificing quality.
“We use the tool to avoid waste, but we don’t use it so much to cut,” says Alain Ané, vice president of human resources for Phoenix-based Fox Restaurant Concepts, a user of HotSchedules. “Because there needs to be an appropriate level of service for us to maintain our promise to the guest, we want to schedule in a very responsible manner. We err on the side of having more staff on the floor than not. It’s not seen as a cost-cutting tool. It’s seen as a mechanism to help with scheduling, for us to better understand our patterns, to be more in sync with the business. “
Ané says minimum wage issues aren’t hitting the 39-unit restaurant group as much as the need to compete for and retain quality staff.
There’s more pressure coming from the economy being relatively strong in our space,” he says. “Employees have different options. What we end up doing is paying a little bit more to attract talent.”
Ané says the technology empowers staff members to take more control of their own schedules—they can swap, drop, or pick up shifts (with approval from a manager) from the palm of their hands.
“Culturally, it has not been an issue,” Ané says. “They see it as cool.”
And, likewise, empowering employees frees up management.
“Not only do you manage labor, you’re also saving precious administrative time,” he says. “We want our managers to be on the floor manning the business, instead of in an office handling that administrative piece.”