The Power of Time
Scheduling a hospitality workforce has become a costly nightmare, especially for those with changing service requirements. Inefficient scheduling wastes money, and labor costs already encompass the largest slice of any budget. With roughly 11 million leisure and hospitality workers from 2004 research (United States Bureau of Labor Statistics), that translates to days and days of lost time from tracking time and forecasting labor calculations.
Although labor-management software is not new, more and more restaurants and hotels are turning to this type of tool to improve productivity, provide better service with accurate staffing levels, reduce costs and track accurate working hours. A number of different options exist ranging from biometric solutions to Web-based scheduling tools.
Power of touch
A 58-year-old, family-owned restaurant in Schenectady, New York, knew there was life beyond paper time sheets. Morrette's King Steak House needed an automated process to track the schedules and labor for its 18 employees, which became more time-consuming as the restaurant grew.
David Pasquariello, president and owner of Morrette's, toyed with the idea of a punch clock but realized that solution almost requires hiring someone just to manage that process. Then he heard of a beta test through Lathem Time (lathem.com) in spring 2005 for its TouchStation biometric time system. The TouchStation is attached to a computer and automatically calculates worked hours, tracks sick/vacation time, and provides a variety of time and labor reports. Morrette's transitioned to the new system completely by the end of May.
"The biometric system offers a tremendous amount of control and makes my payroll life so much easier," Pasquariello says. "I grossly underestimated how much we could save by having this system."
To clock in and out, Morrette's employees place their finger on the reader as they enter and leave the restaurant. The biometric solution memorizes patterns on employees' fingers to discern one person from the next--but not as sophisticated as the police version. The system offers Pasquariello the ability to set limits for employee shifts that require his approval before they can be paid for any extra time. Pasquariello estimates he saves a couple thousand dollars a year just from employees not working an extra 15 minutes here or there.
Payroll is now a breeze, as well. Employee information is sent directly to the restaurant's accounting package, and payroll is complete in about 15 minutes versus the two hours it took in the past.
JRM Bakeries, owner of 23 Cinnabon stores in six states, transitioned from manual paper scheduling to a fully automated process in July 2003. JRM Bakeries' Cinnabon locations added RTIconnect from Restaurant Technology (internetrti.com) for its labor scheduling and forecasting. An autobuild feature in this system gives stores the opportunity to build schedules based on the business needs, rather than on employees' availability to work. This helps JRM increase business when it has staff at appropriate levels for peak times. Managers set minimum and maximum hours for employees, and the schedule calculates what labor is needed to support each shift. It also automatically schedules breaks for minors within the state or federal laws.
"It can be easy at the store level to let guidelines go by," says Denice Devito, special projects manager at JRM Bakeries. "Now you set the parameters up, and you don't have to remember when you build a labor schedule."
Devito estimates JRM Bakeries has saved around $46,000 by moving to an automated timekeeping system that tracks time to the minute, rather than rounding to the nearest quarter hour. Management also is enjoying improvements such as not having to do manual calculations of the projected labor. All of this takes the guesswork out of scheduling by creating parameters around the store's individual needs.
Similarly, when Baja Fresh decided to move to a new back-office system, keeping control of labor costs was a key concern. Last year Baja selected a labor solution from eRestaurant Service (erestaurantservices.com) to manage inventory and labor costs at its 121 company restaurants.
"Baja Fresh has found that eRestaurant has multiple ways in which it pays back the initial investment in terms of controlling inventory and labor costs in an effective and easy to use enterprise solution," explains Natascha Kogler, CIO.
The Ritz balancing act
At Ritz Carlton, labor management is all about balance as the luxury hotel chain considers the needs of its guests, associates and the financial side of the operation.
"We need to make sure we provide that luxury level of service, so when we schedule we do so based on those expectations," says Len Wolin, corporate director, labor management, for Ritz Carlton.
Ritz Carlton uses its labor management software--added about two-and-a-half years ago--for a number of key pieces. First is forecasting how busy the hotel will be the following week. The volume of expected business helps the Ritz determine how to staff accordingly. Next are its labor standards, which are developed individually for each hotel. These guidelines help the Ritz determine how many associates should be scheduled based on the expected volume. All of this leads to scheduling, which allows the Ritz to determine the number of hours of labor needed for each day or week.
Each hotel operates in a decentralized fashion with servers that run the labor management software. Associates punch in and out with an electronic time card that connects to the server. Payroll receives this data each week to process associates' checks.
Ritz Carlton has experienced a number of benefits from its transition to labor management software. Wolin says the hotels saw an improvement in productivity right away. The automated system also helps associates get paid accurately the first time. Quality of service also improved based on the ability to look position by position at the correct labor needed to provide excellent service.
"Now, we provide leaders with a tool so they can truly see what's happening on a day-to-day basis," Wolin relates. "This tends to become more proactive labor management rather than reactive."