2009 March: Falling Short

2009 March: Falling ShortUnexpected staffing shortages can make your life — and your employees’ — an unholy nightmare. If customers are negatively impacted by the reduced manpower, your bottom line can take a pretty horrifying hit as well. And yet, in this economy, where operators are focused on cost-cutting, encountering this problem has become likelier than ever.

While it’s true you don’t want to overstaff, it’s dangerous to run too lean; reducing labor to the bare-bones minimum will end up costing you more than you save, says Arjun Sen, president of Restaurant Marketing Group, a Centennial, Colorado-based consulting company.

“Restaurant operators need to ask themselves, is the guest paying less? Is the guest coming with lowered expectations? Of course the answer’s no,” Sen says. “So reducing labor means serving the customer with less while they’re paying the same, or more, for a reduced experience and hoping they won’t notice.”

But they will, Sen continues. Through their “Leaky Bucket” study on customer attrition, they discovered that a series of minor slips (slow greeting, late-to-table beverages, etc.) are viewed just as negatively by customers as one big mistake. In fact, the minor ones are often more detrimental because, unlike a major mess up, they typically pass unnoticed and unaddressed.

Sudden shortages happen, however, even if you’ve staffed properly (see sidebar). People call in sick, or fail to show up at all, and then you’ve got a problem.

Cross-training is one of your best contingency plans, Sen says. Jeff Miller, owner of three Extreme Pizza franchises in the San Francisco Bay area, cross-trains his drivers and cooks on the POS system so they can step in when cashiers go missing (managers are cross-trained on all stations).

Cashiers are usually his least reliable employees since they’re typically high school or college students, explains Miller. At the same time, because 60 percent of their business is delivery and the cashiers answer the phones, manning that position is essential.

Suzette Megyeri, co-owner of Bambino’s Italian Eatery in Colorado Springs, says at least half her staff is cross-trained. Employees look at learning new positions as advancement opportunities. Anyone interested in promoting to manager must be willing to cross-train on all positions.

Managers offer an important defense against shortages. Ron Inverso, owner of Ron’s Original Bar & Grill in Exton, Pennsylvania, normally has two managers per shift. If they’re down by two servers (one down generally isn’t an issue) a manager will wait tables. Since all managers have gone through a kitchen training program, they can fi ll in there as well.

And then there’s another resource — you, the owner. Seven years into the business, Miller is still making deliveries. Megyeri comes in on her days off. And Anthony Marku, owner of Anthony’s Pizzeria & Italian Restaurant, a three-site operation in Orlando, still busses tables. His only complaint? “Because our restaurants have (won local awards) people recognize me. The problem is, they know I’m the owner so they don’t tip me,” he laughs.

Being proactive rather than reactive can help you get the upper hand on shortages. A good move? Identify areas where shortages are likelier to happen and compensate accordingly, either with cross-training, beefing up the staffing for that position, or employing other strategies. Marku says it’s his morning shift that’s most vulnerable to no-shows. Consequently, he requires employees to arrive an hour earlier, giving his managers time to find replacements.

For especially busy times like holidays or special events consider implementing an on-call policy. Miller does this for certain things like Super Bowl, asking a couple of people in all positions to remain on standby until a specified time.

Hiring more part-time staff might give you a greater cushion against shortages, For example, Megyeri says that most of her 30 employees are parttime. Each shift generally requires ten employees. Consequently, on a typical day, she’ll have at least 10 people with the whole day off they can call if necessary.

Establishing firm policies can also give you better control. Inverso’s approach is typical. “Employees are responsible for covering their shifts,” he says. “If they don’t, or if they’re late, or if they don’t call ahead of time, we issue an incident report. Get two or three of these and they’re out. “You hate to fi re them because they’re kids,” he continues. “But you can’t set a precedent. You have to set the policy, make sure everyone knows it and follow it.”

But firings are rare because employees like coming to work, Inverso says. In fact, the operators appearing here say they focus on creating pleasant environments that emphasize teamwork and accountability as a deterrent to no-shows and shortages.

“You want to create a sense of being part of a team,” says Sen. “Define the goals (we want fewer than two percent customer complaints), have a daily report card in front of them, and celebrate when you reach that goal.”

And if faced with a serious shortage, fess up to customers, Sen says. “Tell them the problem and what you’re doing to rectify it,” he says. “Reward them for their patience by offering them something free. It’s better to let them know rather than hoping they won’t notice.” ?

Calculating staffing requirements

Ron Inverso, owner of Ron’s Original Bar & Grill in Exton, Pennsylvania, doesn’t know how others calculate staffing requirements; he only knows that his system helps him keep his levels on target. Here’s how he figures it out:

First look at projected sales (A). Multiply this by your payroll budget percentage you want to meet (B) to determine the dollar amount you can spend on payroll (C). A x B = C.

Then, from your previous history (take a three-week average) determine what your average payroll cost is for the week (D). From this same period, take the average hours you spent (E). Dividing D by E gives you the average hourly rate (F). D/E = F.

Divide your payroll budget (C) by your average hourly rate (F). This is your hourly budget, the number of hours you can spend to meet your budget considering your projected sales. The hourly budget can be additionally broken out by FOH, production, delivery and management.

Pamela Mills-Senn is a freelancer specializing in writing on topics of interest to all manner of businesses. She is based in Long Beach, California.