We’re back with another Q&A session with FoodTec’s Daniel Flaherty, VP of Business Development, to talk about employee retention. In today’s cut-throat, tight-margin industry, employee motivation and engagement are more important than ever. We sat down with Daniel to find out about what’s challenging today’s restaurant owners and managers; hiring, retention, and the psychology of working in a restaurant these days – and how technology has the potential to help.
When you speak to restaurant owners, is employee motivation and retention a big issue?
Daniel: Restaurants are service business, so success or failure often begins with the staff. The labor market is extremely tight for restaurants, costs are going through the roof and minimum wage hikes apply pressure. As a result, restaurants are forced to run leaner than they did years ago in terms of number of bodies. So, they’re looking for ways to get the most out of the employees that they can afford. But you have to be careful with the modern work staff – if you yell at them because they did something wrong, they either grow to resent you quickly or they just leave as they can go get a job down the street at another eatery. So, restauranteurs, especially the landmark guys who’ve been doing this for 20, 30 years, can’t reprimand the way that they got away with for so many years. The modern workforce demands better treatment.
The boom of the gig economy has also had an impact on turnover. As opposed to working for $12 or $13 an hour sweating in a kitchen, doing manual labor and being physically exhausted, those same workers may opt to drive for Uber, Lyft, DoorDash, Postmates or Instacart or one of these on demand services they can sit in their car and not have to clean out fryer grease, get burned, get cut, deal with the yelling and screaming and the pace of the kitchen. It’s really thinned out the workforce selection.
But you still have to hit your performance goals as a company in order for your business to thrive. So managers are looking for new ways to motivate staff while still minding staff retention.
Driver staff has one of the highest turnover rates – maybe second to servers. Is kitchen staff usually pretty solid or is there high turnover there as well? Do you have any sense, anecdotally, of turnover rates you see in kitchen staff for these restaurants?
Daniel: I have heard some statistics that it’s trending right around 300% right now. Meaning you will flip over that job three times per year for whomever. So, you’re looking at a four to six months shelf life of people that stick around. Now obviously every store is going to have those rock solid folks that are there through and through thick and thin, but there’s so much demand for restaurant staffing these days, anyone who can work a flat top or a pizza oven or a fryer may jump ship over the smallest thing.
To improve motivation and retention rates you mentioned that a different channel of communication is needed. Can you expand on this?
Daniel: The thing that I have found when talking to operators is they have noticed now that historically they had to spend a lot of time teaching people, “What does out the door mean?”, “Why is it important to hold through to a certain threshold?” They found themselves having to explain and educate a lot of the aspects of the business. But with technology, such as FoodTec’s Scoreboard, it allows restaurateurs to give immediate feedback of, as a simplistic example, “green”, “yellow” and “red”, to provide indicator of, “Are we doing good, mediocre or bad?” “And if we are approaching bad then what can we do to get back into the green?” So, it’s giving a lot of instantaneous feedback to the store to make sure that they are performing in the ways that helps meet target goals. The system presents aggregate staff performance objectively – instead of a manager, who could be viewed as overbearing or micromanaging or always on top of the crew. In other words, it’s not personal – it’s just pure data.
So with technology feedback is more transparent and if an operator or restaurant is annoyed about something, it’s not just because they are a jerk, it’s because performance is not as it should be and/or they are falling behind in their service performance goals.
Daniel: Right. You’re seeing it in all forms of technology for example with Apple watches and different wearables. Everyone knows you’re supposed to do so much exercise per day. Now the thing vibrates you saying, “Hey, you’re behind your steps, get up.” Technology now has the capacity to reaching out to you saying, “Don’t forget X because you want to hit your goal.” But the difference is that is not a human breathing down your back saying, “Hey what did, or didn’t, you do today?” It’s almost a personless motivator to make sure you’re staying on track and reaching your targets.
So, Scoreboard, FoodTec’s latest product can do just that i.e. act as an motivator? In terms of like kitchen display systems, why hasn’t anyone thought of this before? It seems like it’s kind of obvious. I mean, you already have a KDS in which you have tickets, but there’s really never been any other kind of sense of publicly known KPIs. Is that correct?
Daniel: There has always been the cattle prod in the stores that have KDS because alarms go off when tickets are taking too long. It’s a very negative approach. What they are not showing you is, “Hey, you’ve hit 92% of your orders within the allowance.” With Scoreboard, we’re displaying both the positive and the negative, allowing operators to see overall performance and say “Great, we’re on time, 92% of the time, let’s focus on that 8%”. In a traditional quick-serve market, for example, when the drive through line gets too long or orders are taken too long, it sets alarm and it fed that old management philosophy of squeakiest wheel gets the oil, but now it’s giving everyone a chance to see what coming down, know when they’re doing a good job and know when they can do a better job.
It sounds like it also has the potential to have a positive impact on the working environment because those hard-driving managers can actively view performance of their team giving them the opportunity to reward or compliment employees for a job well done etc. which in turn may help retention. It’s not the fact that they’re just invested in being more competitive, but it has the potential to reduce workplace tensions when things are going well.
Daniel: Yes, absolutely. And also something that is rather unique to the FoodTec ecosystem is that we can get that information in near real time back into the store so that in a multiunit environment they can see how are they doing against the next store or how are they doing against all the stores in the territory and it gives them that sense of gamification. So sometimes it’s, “Hey, we’re in last place right now and we need to move up because we don’t want to be in last.” We’ve found most employees have some sense of competition – no one wants to be last – so they’re naturally going to get motivated to go ahead and improve their performance to try to move the needle.