How to simplify restaurant payroll with labor management software

Published November 22, 2021

Restaurants can grow profits through two main avenues: (1) top-line revenue growth through increased customer traffic and resulting sales or (2) bottom-line growth by cutting costs and increasing the margins. Though there are many widely adopted strategies for increasing sales at restaurants, top-line growth isn’t always the most feasible option for local restaurants.

Take 2020, for example. Due to the COVID-19 pandemic and global shutdowns, there was very little restaurant managers could do to boost customer purchases. 

Regardless of external factors and customer preferences, restaurants do have some level of autonomy over their costs, especially labor. A modern labor management software can play a key role in managing labor costs while maximizing workforce productivity and driving efficiencies. 

Why is effective labor management so important?

Workforce management directly impacts your restaurant’s earnings. Scheduling too many workers, for example, results in higher labor costs, while scheduling too few can negatively impact service and sales.

Labor management plays a critical role in keeping earnings high, but handling it effectively can be a challenge.  There’s no one-size-fits-all solution when it comes to labor management because no single employee or hour of work is the same. The intricacies of labor management require incredible amounts of time and energy from restaurant managers that could be better spent elsewhere.

In addition to these considerations, restaurants constantly face new opportunities to embrace technology. Gone are the days of paper schedules posted to breakroom bulletin boards. 

It’s common for schedules to change from the moment they’re posted as workers swap shifts or request additional hours. The backend software that supports restaurants’ internal processes (such as like labor management) should embrace digital transformation just like the front-of-house software used by customers at the point of sale. In a nutshell, robust labor management software can help your restaurant deal with the intricate challenges related to labor management, and the data it provides enables you to track trends and identify efficiencies. 

How to move the needle with labor management software

Free up managers’ time

As we’ve said, labor management (including staffing, scheduling, etc.) is one of the largest time commitments for restaurant managers. As labor markets tighten, there’s a greater risk that management will spend too much time on these tasks.

Minimizing time spent on these planning activities can free your manager up to coach employees, chat with customers or reduce hours altogether. Labor management systems can foster this time save in myriad ways, like storing historical data on staffing needs (for example, you may need more hands on deck during certain peak weekends throughout the year). This gives your manager the tools they need to optimize scheduling.

Related: Easy tips you can use to add long-lasting skills when training your restaurant staff

Distribute hours thoughtfully

Most labor management software comes with tools like availability notes and staff ratings. Your manager can review this data to identify areas where hours can be reduced and reallocated. These employee insights—like workers’ scheduling preferences—coupled with the smart sales trends mentioned above, can be aggregated using the software to produce suggested weekly schedules for your manager.

Better yet, schedules can then be digitally distributed to your restaurant staff. Ultimately, labor management software can save time and increase productivity by giving management a complete picture of scheduling needs.

Improve flexibility to switch shifts

The shift work of the restaurant industry naturally lends itself to swaps, bids and trades among workers. And another great thing about labor management software is that it’s not only useful for managers—workers can benefit, too.

Today, almost everyone has a smart mobile device. Most labor management applications include an employee-facing app that makes it easier for your staff to access schedule information. This feature gives them the flexibility to submit shift-change requests remotely and quickly on a virtual platform.

This also saves managers time by allowing employees to swap hours amongst themselves without having to involve a manager. Notifications can be set up to request manager approval so they’re kept in the loop, but this type of software gives employees autonomy to take control of their own schedules.

“Daily and in real time, we use [our labor management software] as home base for our scheduling,” said Fred Castellucci of Castellucci Restaurant Group. “It's about being able to track [in] real time and then capture historical wage labor cost percentages, so that's really where we focus our energies.”  

Gain insight into employee performance and health

A best-in-class labor management system can provide insights into the behavior of your employees. For example, some systems can run checks on employee schedules throughout the week to help you identify potential conflicts and inefficiencies. You can program the software to flag overtime hours or hone in on staff working beyond their specified preferences.

Understanding employee productivity is paramount to reducing labor-related costs and maximizing workforce performance. We know that paying time and a half for overtime hours or footing the bill for high attrition rates if employees feel overworked can drive up expenses. An effective labor management software gives you the tools to avoid costly situations.

Labor management software helps decrease restaurants’ labor costs, improving their bottom line. Adopting gold-standard labor management softwarelabor management software can help your restaurant managers utilize their time more effectively while empowering your employees to take control of their hours.

Moving forward, these new labor management tools will play an increasingly significant role in successful restaurant operations. Modernizing your restaurant’s approach to staffing, scheduling and managing payroll will help you stay nimble and adapt quickly to changing environmental factors and customer preferences. It’ll also enable management to focus on growing, developing and engaging with employees. In a nutshell, adopting a robust labor management system is a win-win for all parties involved.

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