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How to Fix Costly, Yo-yo Staffing Levels for Restaurants

Does your restaurant yo-yo between having too many or too few staff on shifts?

Does your restaurant yo-yo between having too many or too few staff on shifts? Diagnosing and fixing this costly issue takes care and insight.

We’ve all been there as customers. The diner is crowded, staff are run ragged and it takes too long for food to arrive. The operation feels a bit shambolic and some of the orders are wrong too. This all casts a shadow over an evening out with friends.

At other times, it’s a different story. The restaurant is half full with too many staff are on duty. They stand around, seeming disengaged and bored. The service is lacklustre.

This is all from a customer perspective, of course. But incorrect staffing levels can also have a profound impact on employees and businesses – damaging the bottom line and the long-term future of a restaurant.

Here’s an analysis of the problem and how it can be solved.

The cost of too few staff 

Understaffing can lead to poor service quality as employees become overwhelmed and unable to provide adequate service. Customers vent their feelings to waiting staff in the diner and online. The whole pressure of the situation will impact morale and could cause some staff to quit – including managers. The business starts to gain a reputation for being a “stressful place to work”.

The scenario seems so avoidable. A few extra staff might have put those shifts on an even keel. But then a painful cycle ensues …

Any short-term labour savings are wiped out. Disappointed diners never return, reviews put off other customers, demand dips and revenue diminishes. The restaurant finds it hard to attract and retain quality staff. The business needs a reboot to get it back on track.

The cost of too many staff 

Overstaffing will inflate payroll costs as more employees are scheduled than is necessary – which takes an immediate bite out of profits.

As we mentioned earlier, overstaffing can also impact employee morale. They can feel disengaged and the hours drag. People can sense their skills are under-utilised and they’re just wasting their time. This can be a breeding ground for negativity in a workplace – and may prompt people into looking for a new job.

Restaurants then face the problem of recruiting, hiring and training costs as well as lost productivity during the transition and staff onboarding. A constantly-changing team can create a sense of defeat and instability too.

Failed fixes for staffing levels 

Managers are only too aware of staffing level issues. But it’s possible to attempt to solve the problems in the wrong way.

One tactic is to attempt to run a tight ship – with small crews scheduled for each shift – and then rely on using overtime whenever things get busy. But this is unsustainable. Overtime is expensive, which hits the bottom line.

What’s more, overworked employees can become less productive, morale can reduce and team/manager relationships can sour. This can lead to a decrease in overall restaurant performance. Over-reliance on overtime can result in businesses losing their best and most willing staff through burnout.

Diagnosing the issue correctly 

At the core, overstaffing and understaffing issues are about predicting customer demand – and getting it wrong. Labour costs are out of kilter with the money coming into the business.

You’ve got to have some sympathy with managers. Traditionally, scheduling processes and spreadsheets can be time-consuming and prone to errors. Setting staffing levels can often rely on gut feeling and guesswork. But there is a better way …

With the right technology, restaurants can understand customer demand patterns – breakfast, lunch and evenings; weekdays and weekends; month after month; season by season. Advanced analytics can take previous records and suggest the optimum staffing levels with a high degree of accuracy. You can then create your staff schedules with confidence.

This can result in significant benefits:

  • Greater profitability: Staffing levels stay in sync with demand. In turn, any rise in your labour costs will be covered by an increase in takings. Overtime is kept to a minimum. This is a sustainable business model. The business has a chance to grow and flourish, based on favourable customer reviews.
  • Customer satisfaction: Diners benefit from a service that feels as if it’s ticking over at the right speed – and food arrives within expectations. Servers seem motivated and attentive. Customers can return to the same diner and get a consistent service.
  • Employee confidence: Staff regain confidence in management and how teams are rostered. They get good notice of upcoming shifts, so they can balance this with their private lives. Service is brisk and busy – but not chaotic. People feel utilised correctly and there’s a stability about the business that leads more staff to want to stay in their jobs.
  • Management efficiency: With the right tech at their fingertips, managers feel they can satisfy the financial needs of the business – without incurring the ire of staff or customers.

Discover more 

How else could you save money? Request a copy of our guide “Five effective ways for UK restaurants to reduce payroll costs”.