The Importance of Teamwork in the Restaurant Industry

The Importance of Teamwork in the Restaurant Industry

by | Feb 22, 2017 | Business Toolkit, Management

From the moment the first restaurant opened, there’s been a divide between the front of the house and back of the house staff. Some restaurant owners choose to ignore the tension, refusing to believe it exists. Some accept it as the way things will always be. The rest strive to end the eternal struggle. For the sake of your restaurant, we hope you’re in the third category!

Why the struggle

Many things can cause a rift between your FOH and BOH staff.

When a customer complains, someone’s to blame and employees begin to point fingers. This is especially the case during your rush when etiquette and/or procedures seem to be thrown out the window. This causes mistakes, service bottlenecks, long ticket times, unsafe conditions, and overall dissent from those trying to do the right thing. No matter what, it’s a breakdown in your restaurant’s teamwork that causes a trickle-down effect: if the customer is unhappy the staff will be, too.

No matter what, it’s a breakdown in your restaurant’s teamwork that causes a trickle-down effect: if the customer is unhappy the staff will be, too.

Sometimes, especially with newer team members, people are simply not aware of the troubles they’re burdening the other departments with. Servers who don’t break down their dishes when delivering to the dish pit cause the Plongeur unwanted (and nasty) extra work. Line cooks, expos, or sous chefs who send out unfinished, unattractive, or wrong plates cause servers an undue earful and embarrassment.

Because of the perceived separation and lack of communication, team members may not even be aware they’re causing a problem until it’s too late.

Why teamwork between departments is important

Two words: Customer Service.

“The main objective for teamwork is for the organization to realize its full potential despite any possible differences individuals might have.” – Hospitality Concepts

In a restaurant, bar or hotel, no matter the concept or price-point, the one thing that sets you apart from the others will be your quality of service. If every cylinder of your business is not firing on point at all times, the guest will notice…and they won’t hesitate to let you (and the world) know.

If your team is humming along like a well-oiled machine, you may not always hear about it, but you’ll certainly notice your growing bank account.

How to promote teamwork between FOH and BOH

First, don’t make a distinction between the two at all. Tear down that figurative (or literal) wall between the kitchen and dining area by educating your staff on the flow of a customer’s order. From the moment a customer sets foot in the establishment every single employee affects that customer’s experience, whether directly or indirectly.

Regarding training, an extremely beneficial tactic is to cross-train your employees in the FOH and BOH. After working a week in the dish pit, servers will never forget to break down their dirty plates again. And kitchen staff will get to see first hand how their efforts in the back are received by guests, whether positively or negatively. No chef likes to face an unhappy guest or hear a bad review of their dish, all while having to keep their composure. One week of that and the kitchen team will empathize with the FOH.

Having a few relaxing moments to get to know each other outside of the working relationship can do wonders for team building.

Pre-shift meetings attended by the full shift’s team always work well. Issues with either side can be addressed, announcements can be made, and anything affecting the upcoming shift can be worked out as a team. Having a few relaxing moments to get to know each other outside of the working relationship can do wonders for team building. Friendships are always made in those calm moments before the storm.

Bear in mind, your staff is like a sports team. Everyone has a position to play but in the end, they’re all striving for the same goal. Teach your team that crossing the barrier between the front of the house and back of the house is beneficial to everyone. Avoid creating a separation and other trouble by fostering a team environment, by treating all staff equally, and by encouraging staff to interact with each other frequently. And, as always, if you’re staffing up, Sirvo is here to help!

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Cost Per Hire: How to Calculate It, How to Control It

Cost Per Hire: How to Calculate It, How to Control It

by | Feb 3, 2017 | Business Toolkit, Management

Cost per hire is one metric that is especially easy to lose sight of and underestimate, as these costs tend to overlap with existing business functions — paying HR staff, advertising, administrative work and so on. When you actually sit down and run the numbers, however, your total hiring costs for any given year can be eye-popping.

As of 2012, the standard definition of cost per hire is the sum of all recruiting costs (both internal and external) divided by the total number of hires. According to the Society for Human Resource Management’s most recent Human Capital Benchmarking Report, the average cost per hire for any type of business is $4,129. However, if you’re part of a large chain (“large” in this case being over 10,000 total employees), then you can expect that cost to be roughly halved.

In the leisure and hospitality industry, which includes restaurants and hotels, this individual cost is likely to be lower than average as the majority of positions are nonsupervisory and don’t have large expenses associated with them like relocation costs or lengthy training. However, because the turnover rate is nearly 50% higher than the average of the private sector, the total cost over the course of a year can definitely add up.

Calculating cost per hire

As with your basal metabolic rate, cost per hire is one of those things that’s almost impossible to get an exact number for, but doing a quick-and-dirty calculation that is close enough to be functional is actually pretty easy.

Here’s the simplest formula:

calculating cost per hire

Keep in mind that costs and number of hires refer should both be calculated for the same period (e.g. month or year).

Internal costs

Internal recruiting costs are expenses “related to the internal staff, capital and organizational costs of the recruitment/staffing function.” These include, but are not limited to:

  • Salary for any related HR and hiring personnel
  • Salary costs of time spent hiring by other staff members (conducting interviews, screening applications, and so on — if this is too complicated, leave out)
  • Any referral bonuses you might be offering to existing employees

External costs

External recruiting costs refer to expenses “incurred to external vendors or individuals during the course of recruiting.” These include, but are not limited to:

  • Fees paid to outside employment agencies
  • Fees paid to post job listings in newspapers or on websites
  • Cost of drug screening and background check
  • Fees paid and materials cost to attend any job fairs or similar events
  • Cost of any required aptitude tests
  • Cost of relocation
  • Cost of any training period in which the new employee is not doing any productive work

Any costs after an employee is hired, such as training, is not included in the cost per hire calculation.

Total hires

The total number of hires could be measured differently across companies. However, these usually include all internal and external hires, both full and part-time, who:

  • Went through a hiring process
  • Temporary staff on payroll and promoted to a full-time position

Divide the total of all the recruiting costs by your number of new hires for that particular time period, and you now have a pretty good idea of your cost per hire, for that time period at least. If you do this on a monthly or quarterly basis, average your totals for a more accurate picture.

Controlling your cost per hire

OK, so you have a better bead on your cost per hire. Now, what can you do to bring it down?

Let’s start by addressing the elephant in the room that we touched on earlier: turnover. After all, if employees don’t leave, you’re not faced with the cost of replacing them. Annual employee turnover in the hospitality industry typically hovers between 70-75%, well above the average of about 45% for all other types of private sector jobs.

Combatting turnover starts with optimizing the hiring process. Many job seekers are now looking for jobs online via job boards and social networks. So why not leverage that to your advantage? Consider using niche job boards, like Sirvo, that not only make it easy for job seekers to apply for jobs but also provide business tools so that better hiring decisions can be made.

Another factor that contributes to turnover is that, for many people, a restaurant job is just something to pay the bills while they pursue their dream, and that isn’t going to change. However, employees don’t always leave because this is just a McJob to them; when they feel that management doesn’t listen or care, then there’s almost nothing to keep them from looking for greener pastures elsewhere. Little things that don’t cost much, like better communication and small incentives such as shift meals and performance bonuses, can go a long way. Likewise, the employee may no longer regard the job as disposable if a clear and realistic path to advancement is presented to them.

At the end of the day, knowing where your business stands in terms of hiring costs is crucial, especially in the hospitality and restaurant industry where employees at the heart of the business. So, get your expenses together and your calculator out!

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Training Hacks: Materials and Resources Essential for New Hires

Training Hacks: Materials and Resources Essential for New Hires

by | Jan 16, 2017 | Business Toolkit, IndiTips, Management

After hiring, you’ll want new staff to start training as quickly as possible. This ensures they hit the ground running while avoiding rookie mistakes. In order to make this possible, however, training materials and resources must be ready to go, especially these six items that every new employee should have in hand the minute they walk in the door.

New hire paperwork

It’s a good idea to greet new hires with these materials. And whether you’ll be doing the training yourself, or you have a designated trainer, a senior staff member should sit with the employee while they fill out their new hire paperwork. This allows you to go over the materials with them and it’s the perfect time to set your performance expectations.

After the paperwork has been completed, take your new hire on a tour of your establishment. This helps to familiarize them with the business. During the tour, you can introduce them to other employees and tell them any names or terminology they need to know. It’s also a good time to show them where any safety equipment or materials are located.

A training schedule

Don’t leave new staff in the dark about training ins and outs, especially the timeline. Depending on the size and type of your establishment, training may only last a few shifts, or you may require weeks before you feel a new employee is qualified to work alone. Also, remember, you may need several training schedules based on position, so be sure to plan accordingly!

With this in mind, try to have the entire training schedule planned out. Let them know what days they’ll be working, what area of the business they’ll be learning about each day, and who they’ll be working with.

Having at least one designated trainer for each position is a great way to make sure all employees are trained the same way every time.

Designated trainer(s)

Having at least one designated trainer for each position is a great way to make sure all employees are trained the same way every time. Even better: having a few trainers that can share the load. This also takes some of the pressure off of you, allowing you to continue running your business while your trainer supervises new employees.

If possible, introduce new hires to their trainers immediately. This will allow them to get to know each other and will also ensure that new employees will know who to find when they come in for training shifts.

Printed materials or learning aids

If you have printed materials for your new employee, make sure they’re ready to go right away. If you use an app or website, make sure you make the employee is aware of the site or app and how to use it in conjunction with their training. There’s nothing worse than telling your new hires to read an article or complete online training without providing them with the necessary information to access the content.

Tests are a great way to gauge where trainees are in their learning process.

Tests to verify training/learning

Tests are a great way to gauge where trainees are in their learning process. So, before your new employee is ready to deal with customers on their own, you’ll want to test them to see if they’re grasping the training. These tests can be anything from online quizzes to mock restaurant scenarios. Of course, testing formats and parameters should be discussed with new hires and included on training schedules.

Tests are also a great way to see how the trainer is doing. If you start to notice new employees all seem to make the same mistakes or perform the same tasks incorrectly, sit down with your trainer(s) to make sure they’re teaching the correct habits and skills.

A clean, new uniform and name tag (if required)

Finally, if you require a uniform, make sure you have a fresh one ready on their first day. This goes a long way in making your new recruit feel like they fit in and are a part of the team right away.

If you’ve read our first post on Training Hacks, you’re well aware of how hard it is to find good employees. Make sure you’re not just a stepping stone on their career path. Welcome your new employees warmly and have a comprehensive training program in place so they feel secure in their job choice.

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The Potential Positive Impact of Rising Wages in the Hospitality Industry

The Potential Positive Impact of Rising Wages in the Hospitality Industry

by | Dec 26, 2016 | Career

With Colorado and other states requiring an increase in wages for hospitality workers and tipped employees, many hospitality workers and managers are worried about the potential ramifications. Will it lead to fewer hires, less staff on hand to take care of customer demands, and fewer hours for existing workers, or will it lead to growth and prosperity within the hospitality industry? Here’s the good news: rising wages in the hospitality industry could turn out to be a good thing.

The Potential Impact of Rising Wages

Rising wages in the hospitality industry isn’t just an issue that impacts hotels and restaurants. It’s an issue that could potentially have a huge economic impact. The growth in wages leads to a number of things:

  • More people who are able to afford luxuries on their current salary
  • Overall economic growth for the United States
  • Fewer people who are unemployed across the United States

Staff wages may make up approximately 44% of the operating budget of many hotels and other hospitality businesses, but that doesn’t mean that an increase in the base wages of their workers will automatically lead to budget problems. Instead, far-sighted hotels and hospitality businesses will embrace the coming change and use it to advance their businesses.

Historically, when wages have increased, the hospitality industry has experienced a greater increase in income than it has lost income due to rising wages.

How to Make the Most of Rising Wages: Short-Term

For many hospitality businesses, a low increase in the price of their services or goods may be sufficient to offset the temporary shortfall that comes from raising employee wages. This can take several forms:

  • Raising the price of rooms across a hotel by a relatively minimal amount.
  • Decreasing the number of services that are covered by a room rental: for example, the on-site gym might require a daily fee.
  • Raising the price of entrees by a small enough amount that it doesn’t impact customer interest, but it does impact the bottom line.

How to Make the Most of Rising Wages: Long-Term

Rising wages in the hospitality industry mean that hospitality workers across the United States now have disposable income. As other industries raise their rates to match, those workers will be spending their money on luxuries that they couldn’t previously afford. This means that they’ll be spending more money in places like hotels and restaurants. Families who previously couldn’t afford to eat out may be able to fit a weekly or monthly trip to a restaurant into their budget, increasing the income of a restaurant. Families who have put off travel or who have been unable to afford regular trips will be able to get out on the road more regularly, which means that hotels will benefit.

Instead, far-sighted hotels and hospitality businesses will embrace the coming change and use it to advance their businesses.

Historically, when wages have increased, the hospitality industry has experienced a greater increase in income than it has lost income due to rising wages. In order to take advantage of this, the hospitality industry can take several key steps:

  • Create packages geared toward individuals who don’t often get to take advantage of vacations and hotel rooms. Offer small luxuries that will make them appreciate your business.
  • Base pricing on what your target market will be able to afford without straining their budget to help them turn to you instead of your competitors.
  • Look for ways to market to your preferred buyer personas to help bring them into your business.

As other states step up to the plate and increase the wages received by hospitality workers, it’s important to note states like California, where they passed similar laws but have experienced growth and prosperity as a result. The increase in wages for hospitality workers doesn’t have to be a headache. Instead, find ways to embrace this key shift in the industry in order to help your business grow and thrive.

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Restaurant Minimum Wage – What Now?

Restaurant Minimum Wage – What Now?

by | Dec 12, 2016 | Business Toolkit, Management

The Colorado Restaurant Association has been doing great keeping us all up to date in regards to Amendment 70 and how that affects our industry, here is the latest new brought to you by our friends at CRA.

Regardless of how you felt about Amendment 70 (Colorado’s minimum wage ballot initiative), most of you will be impacted by it. We have received many questions from our members about how other restaurants plan to react.

First, to clarify, Amendment 70 is a constitutional amendment that increases Colorado’s minimum wage to $12/hour and the tipped wage to $8.98/hour by January 1, 2020. The passage of this amendment raises Colorado’s minimum wage as follows:

  • January 1, 2017: $9.30/hr. Tipped Wage = $6.28
  • January 1, 2018: $10.20/hr. Tipped Wage = $7.18
  • January 1, 2019: $11.10/hr. Tipped Wage = $8.08
  • January 1, 2020: $12.00/hr. Tipped Wage = $8.98

After that time, wages will increase annually according to the Boulder/Denver/Greeley CPI. They will not decrease in the event of a recession.

What are restaurants doing to cope with these increases?

Each of you will have to determine the right mix of how you will manage this increase. When we surveyed our members on a similar increase in 2015 they responded as follows:

  • 89% will increase prices
  • 72% will reduce hours for employees – ex: keep a smaller staff for traditionally slower times
  • 71% will reduce # of employees – Some restaurants have told us that they are eliminating bussers or runners for example
  • Some may decide to add a service charge
  • Some have mentioned trying tip pooling as a way to help with pay equity

What is a service charge? What is a tip? What is a tip pool? How can I use them legally?

Under both Colorado and Federal law any charge that is automatically applied to the bill and the customer must pay, even automatic gratuities for large parties, is considered a service charge. There are very distinct differences between tips and service charges, here are just a few.

Tips:

  • Are given freely from the customer to the employee, where the customer, in his/her sole discretion, decides whether or not to tip and how much belong to the employee, not the restaurant
  • Management cannot direct the use of that money
  • Sales tax is not applied to a tip

Service Charge:

  • Is anything automatically applied to the bill
  • Is considered revenue of the business
  • Management can determine how the money will be used
  • Funds can be given to the employee but must be done through the payroll system
  • Any money given to the employee from the service charge cannot be counted towards a tip credit
  • Restaurants must collect appropriate sales tax

Tip Pool:

  • Employers may run a tip pool but they must comply with certain requirements
  • The employer must provide written notice to all employees who will be participating in the tip pool prior to their participation
  • Only employees who customarily and regularly receive tips can participate in the tip pool. According to federal law, servers, counter personnel, bussers, and service bartenders can clearly participate.
  • Those that can’t participate are owners, managers, supervisors, janitors, dishwashers, chefs, cooks, and food prep personnel
  • If you are thinking about organizing a tip pool, please contact the CRA to ensure you are administering it correctly

Is there a chance that we can correct the flaws with amendment 70 by altering the tipped wage or adding a learning wage?

We believe that to be nearly impossible. Only one time in the last 100 years was something added to our constitution and later removed – prohibition. In order to change the constitution – as we saw with amendment 70 – we would need to raise millions of dollars just to get it on the ballot – and another several million to educate the public.

For this issue – many of our members who were adamantly opposed to it didn’t give to the campaign to defeat this. Meanwhile, the unions who initiated this have very deep pockets and would fight it heavily.

Going forward…

While this will be a difficult adjustment for a lot of businesses, it is what it is and those who have already started the process will be ahead of the game. It is always a struggle to balance the cost of doing business and providing a fair and liveable wage. We want our staff members to have a good quality of life, but we also want to make sure our doors are open to do so. These are interesting times right now for the industry and despite it all, we will go forward.

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Experience Sirvo for yourself

Sign up now to find hospitality jobs and hire top industry talent.

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