Remaining Revenue Resilient During a Recession with Automation
The hospitality industry has undergone waves of changes these past few years, from a significant decrease in travelers and diners to an ongoing labor shortage. Now they are faced with rising inflation, which has increased 6.4% over the past 12 months.
Throughout it all, businesses have found innovative ways to combat each new challenge – often leveraging automation to optimize their labor operations. For example, fast food restaurants have begun setting up supply chain centers to help with the labor shortage by automating manual processes – e.g., Domino’s Pizza has Distribution Centers that provide its franchisees with pre-mixed ingredients and pizza dough. In addition, a growing number of hotels are using automation to improve their operations, using software-based systems to manage inventory, optimize room rates, and improve the guest experience.
As the majority of the hospitality workforce is made up of hourly employees, companies should also consider implementing a workforce management (WFM) platform that enables intelligent automation through the power of artificial intelligence (AI) to help increase workforce efficiency and productivity while optimizing labor processes and costs.
Optimizing Operations with Intelligent Automation
According to Lightspeed Commerce, the rising cost of food and supplies is among the top obstacles hospitality businesses face, followed closely by hiring new staff and staff retention. What’s more alarming is that nearly half of all restaurants are operating with less staff than normal. Unfortunately, this situation is not going to end any time soon. According to S&P Market Intelligence, while short-term recovery in the labor participation rate is expected to be 62.7% as the lingering effects of COVID-19 fade, the rate is only forecasted to go down to 60.7% by 2035. This means hospitality companies will need to remain laser-focused on ways to optimize their labor operations and improve the employee experience.
WFM solutions utilizing intelligent automation can help employers by enabling greater precision in forecasting sales and labor demand and schedule optimization, factoring in historical data, operations, and events to better predict customer demand by channel and location and ensure optimal staffing across all customer touchpoints. Modern WFM platforms also enable business owners and their managers to stop wasting time on tedious manual tasks – like relying on out-of-date sales forecasts and creating spreadsheet-based employee schedules – and instead focus on what really matters: their business.
Improving the Employee Experience
One key insight the pandemic revealed was that hourly employees – like those who make up the frontline workforce for restaurants and hotels – could easily find alternative, non-traditional gig work opportunities, such as delivering for food apps. These jobs offer the schedule flexibility people need to make money at their convenience. In fact, according to Legion’s findings, 56% of hourly employees find the flexibility to pick up extra shifts and swap shifts as the most valuable benefit outside of pay. For the hospitality industry, this shift highlighted the need to make some changes and provide a better employee experience or risk losing their best employees.
WFM solutions that deliver intelligent automation help alleviate this pressure for employers, ensuring employees’ schedule preferences are met and that they are being assigned shifts based on their specific skills. These employees can also swap shifts with their peers and claim additional shifts as needed. This gives them gig-like flexibility that will keep them happy to continue coming to work for their employer.
Moving forward, it will be critical for the hospitality industry to invest in WFM solutions that utilize intelligent automation to help optimize their operations, maximize labor efficiency, and improve the employee experience simultaneously. Doing this will enable them to remain resilient - and even grow their business - during a recession, by increasing their workforce efficiency and productivity while optimizing labor processes and costs.
ABOUT THE AUTHOR
Michael Spataro is the Chief Customer Officer at Legion Technologies. He has 30+ years of retail WFM, store operations, and technology experience. He spent 16 years leading the Retail and Hospitality Services Practice Group at Kronos. His passion for Retail WFM is rooted in the ten years he was Director of Store Technologies at Gap Inc. Previously, Michael led the Kronos Services Group at Axium. After being a customer, vendor, and consultant, he has a unique vantage point, which makes him a trusted partner when showing retailers how they can use Legion WFM to optimize labor efficiencies and empower frontline employees.