Cutting Back on Servers to Save Labor
Posted by estiator at 8 April, at 12 : 50 PM Print
MANAGING FOR SUCCESS – By CONSTANTINE N. KOLITSAS Business Coach
IN New York City, the government just gave another big pay increase to low wage employees with the minimum wage increase to $15.00 that went into effect in January. Of course, the rising minimum wage had a sea-level shift for all wages as experienced line cooks demanded more compensation to do a job that has much more pressure and responsibility than a dishwasher or utility person. The increase also had an impact on tipped employees who, with the tip credit adjustment, saw an hourly rate increase to $10.00 per hour. With all of this increased pressure on a restaurant’s labor cost, operators are seeking creative ways to trim the fat. Or, in some cases, to trim some meat, because the fat has already been trimmed.
In a Manhattan restaurant that I just helped open, there is an open debate among the managers as to the number of servers to put on a shift. A couple of really good servers with two or three support staff (runners, bussers, host, etc) can handle the entire 25-table restaurant, argues one camp. I belong to the other camp – I would rather see an extra server and one less support person.
The argument for fewer servers has as its locus, a mechanism for servers to make more money (on top of the $2.00/hour raise that the city just gave them on the restaurant’s dime). With a busser to bring water to each table, pre-bus between courses, and clear and re-set tables, the server is able to process more orders, particularly if there is a bartender to make the drinks and a food runner to expedite and bring the food from the kitchen to the guest. But with such a large number of tables, there is not much service that can take place – or salesmanship.
I saw this about three years ago at an Applebee’s that I was monitoring. The server wage after tip credit had gone from $5.00/hour to $7.50 – a 50% increase! The franchise group that ran that location (along with another thirty or fourty) decided to combat the labor cost pressure by installing tabletop tablets for customers to place their own orders and process their own payments. The result was not good. Service suffered, the servers did not spend as much time recommending items and upselling, and customers resented the decrease in server interaction. Yes, they were able to increase the number of tables in a server’s section, but the overall business results were unfavorable.
When cost pressures get to a breaking point, the answer is not always in cutting back, but in growing. Sales solves everything. And to remain competitive, restaurants need to make every effort to increase their sales before they cut back on essential roles, such as waitstaff. And while developing or growing alternative revenue streams (delivery, takeout, catering, online ordering, etc) is the best way to grow sales, these require infrastructure and the development of systems and processes. A more immediate response is to reinforce the server role as something more than order processor – your servers need to be salespeople.
Upselling liquors from well drinks to call brands, recommending wines, selling an appetizer, selling coffee drinks and desserts; these are the things that your servers need to be focused on. When they’re spending every step trying to process orders for ten or twelve tables, then they’ve got no time to sell. And the experience for the guest suffers. I would prefer to have servers with fewer tables and cut a busser. Servers can bring water and pre-bus their own tables (this brings them to the table more often and gives them opportunities to recommend a second glass of wine, or a dessert), and hosts can help re-set them. A tighter labor cost means everyone has to do more. The question, then, becomes if you would rather have your servers selling more and providing more service, or just processing more orders. At the end of the day, a good server will make as much or more money with a manageable section than he/ she would with half the dining room. And the restaurant will certainly bring in more sales.
Constantine Kolitsas is the president of CNK Consulting, a Restaurant Consultant and Coaching business. He can be reached at 203-947-6234 or at ckolitsas@gmail.com.
