How You Can Reduce Your Restaurant Labor Cost With The Help Of Technology

How You Can Reduce Your Restaurant Labor Cost With The Help Of Technology

Apart from the food and the fixed costs, there is one more primary cost the restaurant incurs on a daily basis, which if not monitored diligently can burn a hole in your pockets. Yes, you have guessed it right it is the restaurant labor cost.

Understanding that competent labor is the nerve center of your restaurant business, whose efficient customer service can help your restaurant brand grow like never before isn’t that difficult.

However, it must be stated at the very beginning, that the restaurant industry in the USA is notorious for high employee attrition rate. It is estimated that the labor turnover rate in the US is almost 70%.

As per a recent study from Cornell’s School of Hotel Administration, the cost of losing and replacing one hourly employee can be as high as $5,864. Considering that the turnover rate is 70%, one can only imagine how much restaurants lose out their money on. Hence, it becomes important for restaurant owners in the US to find effective ways to reduce their dependency on the manual labor and reduce their restaurant labor cost, and one of the best ways to do so is by taking refuge in a stellar restaurant management system.

Having an efficient restaurant POS on board will help you reduce your restaurant labor cost considerably, since the POS will automate most of your restaurant operations, and this will help you to run your restaurant with limited staff. From billing, KOT generation, inventory management, to creating a comprehensive  CRM everything will be automated with a stellar restaurant management system.

4 Ways Technology Will Help You Reduce Your Restaurant Labor Cost

Reducing dependency on manual labor is a task that all restaurant owners are striving hard to master. One of the easiest ways of doing so is by employing technology that will automate the entire restaurant operations.

1. Automating The Order Taking

You can reduce the need for manual labor by introducing Tablet Ordering at your restaurant. The customers can view the entire menu display on the Tablet and place the order themselves. The order is automatically pushed into the POS and an instant KOT is generated.

Tablet ordering reduces the order taking time and allows you to serve more tables with less number of servers, thus reducing your restaurant labor cost.

2. Automating The Order Preparation Process

Once a customer places an order it becomes the responsibility of the server to take the KOT to the kitchen and hand it over to the concerned person there, and only then will the preparation of the items start. However, if you have a stellar restaurant POS on board, it will help you to accelerate the entire process.

When a customer places an order, the KOT system when synced with the Kitchen Display System will reflect the orders in real-time. This will help the kitchen staff to start their preparation without any delays. Hence an automated KOT generation process helps in turn in reducing the table turnover time. Also, void KOTs or changes in the orders and other such specifics gets reflected in the KDS automatically.

This helps in minimizing the scope of manual mistakes to a great extent. In addition to this, it will give the servers time to cater to an increased number of tables. 

This directly impacts customer satisfaction since it takes you less time to communicate, prepare and deliver the order. While delivering a stellar customer service should and must be your primary concern, this will help you to keep your customers happy, which in turn will increase your chances of retaining them.

3. Automating The Inventory 

The rising food costs in the US call for a strong focus on stock and inventory management. However, keeping a tab on stock and inventory manually is a task that is extremely difficult to perform in the best way possible. Manual check opens a lot of scope of mistakes, and it leaves the chances of inventory loss through internal theft and pilferage.

In order to avoid such instances, it is exceptionally important that you install a robust restaurant POS which will help you in real-time stock and inventory calculations, which in turn will reduce your dependency on manual labor. A restaurant management system will automate your restaurant’s stock and inventory completely:

  • It gives you the opening and the closing inventory, along with the stock in and the stock out of every outlet on a daily basis. This will help you tally the physical stock available and the ideal stock automatically.
  • It will send you real-time alerts whenever an item in the inventory reaches its reorder level, or whenever an item reaches its expiry date. This negates the need for you to depend on your restaurant’s staff to check the inventory and then place the order, which might often be overlooked.
  • While running multiple outlets, an efficient POS will optimize the entire process by helping the restaurant owner to receive details sales, inventory, CRM reports of different outlets in real-time. All there reports can also be compared, that will help you analyze changes that must be brought forth that will augment your sales further.

4. Automating The CRM 

Manually taking the customer feedback and them updating the customer information in the system, leaves the scope if instances of misplaced information. In addition to this since it is a time-consuming affair, many times it is often ignored and not done diligently by the restaurant staff.

However, creating a comprehensive CRM is extremely important, since you can run personalized marketing campaigns from the customer information garnered, which is imperative if you want to build a band of loyal customers.

With a robust restaurant POS, once you take the customer feedback on the floor of the restaurant, the customer information automatically gets synced in the CRM database. This nullifies the need for any restaurant staff to manually insert all the customer information. Not only is this less time-consuming, and accelerates the entire process, it also leaves helps the restaurant to create a rich CRM, leveraging which you can craft stellar marketing campaigns.

5. Employee Management

Managing the restaurant staff is efficiently is essential if you want to keep your restaurant labor cost in check. A smart restaurant POS system helps you monitor the performance of your restaurant staff by analyzing the number of items they have sold or upsold, the number of tables served, and their service feedback received from customers. Based on this data, you can incentivize the high-performing employees, and further train the ones that are not performing as well.

With the labor turnover rate, restaurants in the US are looking for quick hacks that will reduce their dependencies on manual labor while optimizing the entire restaurant operations. Having a restaurant POS on board will solve half of your problems and will help you take your dream a step closer to running a successful restaurant business.

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Nikunj is the Communications Lead at Restroworks, a global leader in cloud-based technology platforms. In his role, he oversees global marketing and branding initiatives for Restroworks across APAC, the Middle East, and the US.


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