Restaurant labor costs are rising and restaurant operators are feeling the pinch. Historically, it was common for a restaurant to spend 30% of gross sales on restaurant labor costs. Today, many restaurants are spending as much as 50% to 60%, according to the L.A. Times,
New state minimum wage laws may push restaurant labor costs even higher. For example, a new rule in Michigan will raise the state’s minimum wage to $15 per hour by 2028 and phase out the tip credit by 2029. (The tip credit is the exception that allows restaurants to pay a reduced hourly wage to employees who make the majority of their income through tips.) The Michigan tip credit rule sets the stage for similar rules throughout the U.S.
For these reasons, most restaurant owners believe labor costs will keep going up. But for many owners and operators, emergent restaurant technology is helping to offset these costs. Below, we take a closer look at how you can use this exciting new technology to help you deal with rising restaurant labor costs.
A POS system with table-side ordering can improve your restaurant’s efficiency, reduce errors, and speed up table turnover time. Industry leaders like SpotOn and Toast offer some of the best handheld table-side ordering units on the market with features like customized menus, contact free ordering, and cloud-based back office tools
Providers like Lightspeed and Square are IOS-based systems. This means you can provide table-side ordering entirely through iPads. These options offer convenience and compatibility with familiar, easy-to-use devices.
Vendors like GoTab are taking the next step with an interactive system that includes features like phone browser ordering, two-way-text communication between diners and staff, and an option for guests to settle tabs directly on their phones.
With restaurant labor costs continuing to rise, you can’t afford to waste in-house talent on simple and repetitive tasks. Your team members are most valuable when they can focus their full attention on improving the guest experience.
But. of course, somebody has to answer the phones. Traditional automated answering systems can be impersonal and clunky. Fortunately, AI-enabled phone services are dramatically enhancing the responsiveness, efficiency, and customer satisfaction that are possible through restaurant answering systems.
Providers like Kea offer smooth voice ordering, seamless integration with select ordering systems, and intelligent upselling. Loman also handles voice ordering along with menu inquiries and reservation requests. Loman notes that its application not only takes 100% of calls “like a human” but that it also frees up human workers to focus on more meaningful interpersonal tasks.
You may not be able to stop restaurant labor costs from rising. But the right restaurant technology can offset these costs by helping you save in other areas. For instance, inventory management software can help you save money by eliminating waste, reducing spoilage, and streamlining your food supply chain.
And some of the best inventory management systems, like MarginEdge, use real-time data insights to help you see where your restaurant is most profitable and where your operation is losing money. MarginEdge also offers features like invoice processing, user-friendly ordering, and advanced analysis of your menu and recipes. These insights make it possible to make more cost-effective ordering decisions.
Inventory management technology can also be an amazing time saver for your staff, especially team members who are responsible for ordering and taking inventory counts. Providers like MarketMan offer easy access to data and features through an all-in-one dashboard. This means you can use the mobile app to place orders to your distributors faster, prevent costly errors, and take inventory in a matter of minutes right from your phone or tablet.
As restaurant labor costs continue to rise, it’s more important than ever to schedule shifts efficiently. Overstaffing slow shifts is a waste of money. Understaffing busy shifts places a heavy burden on your employees. Advanced scheduling technology can help.
Leading restaurant technology providers like 7Shifts are designed to help busy restaurant managers save time and stay organized with features like smart scheduling, payroll services, and tip management.
Vendors like Push Operations emphasize automation and offer an all-in-one platform for payroll, scheduling, and workforce management, as well as hiring and on-boarding features.
Other providers, like HR Butler, offer comprehensive HR services including benefits management, time and attendance tracking, and HR compliance audits. Together, these features can not only improve scheduling efficiency, but also improve retention by improving the employee experience.
As you can see, you have a lot of options. The newest developments in restaurant technology are designed to help your restaurant deal with rising labor costs. We’ve highlighted a few of our favorite tools for improving operational efficiency, offsetting staffing shortages, and optimizing employee performance.
But the right set of solutions is different for every restaurant. The best way to navigate this crowded space is to chat with an expert. Talk to one of our consultants today. Tell us what you’re looking for, and we’ll craft a personalized recommendation based on your exact needs and your biggest challenges.
Reach out today and schedule your free call.