Q:I believe we lack focus on hitting goals at my business. We’re great at reacting to problems in the moment, and I think sometimes we wait for crisis to strike so we can react to it. If I were to set a few areas of focus for the next year, what are the most critical areas?

A:The restaurant business is full of skilled firefighters. Restaurant workers are wonderful at problem solving on the fly and marvelous at handling multiple responsibilities to run a great shift. Since most managers and owners in entry level positions are themselves experienced firefighters, it’s no wonder planning and organizing work is a major opportunity for improvement in the industry. Consider these three areas of focus for the upcoming year:

Retain your top people.

As unemployment stretches toward historic lows, turnover rates are near record highs. According to TDn2K, the average turnover cost for one hourly employee is approximately $2,100. Turning over a staff of 50 people in a year could cost a business $105,000.

A recent study by Gallup showed only 31 percent of restaurant workers are engaged, with 49 percent not engaged and 21 percent actively disengaged. According to Gallup, companies with higher levels of employee engagement have lower levels of turnover and better profitability.

High-level, engaged performers require high-level management and care. They want specific performance feedback, the right tools to do the work right, growth opportunities, to be heard and, perhaps most importantly, they want great people around them.

When top performers are challenged, their performance improves. When they’re not challenged, they leave. Having solid co-workers and working on a winning team spurs a superior work environment and improves retention and , ultimately, greater sales and profit.

Increase productivity in every position.

Another benefit of higher employee engagement is better performance. Gallup reports 17 percent higher productivity, 41 percent lower absenteeism and 20 percent higher sales with higher engagement.

One common complaint about restaurant workers today is lower productivity. Most restaurants run productivity at plus or minus 65 percent. Set a goal for the next year to move that to 85 percent or higher. This will take careful planning and excellent management.

Mathematically, it makes sense to gave fewer, highly productive employees who are paid more. For example, if Employee #1 is paid $16 ore hour and produces at 65 percent productivity, the effective rate is $24.61/hour. Meanwhile, Employee #2 is paid $18 per hour but produces at 85 percent productivity, an effective rate of $21.18/hour. It’s more economical to have a higher paid workforce with higher productivity provided the size of the business can accommodate the rates.

Imagine if 30 minutes of side work or closing work was completed 20 percent faster. That’s a six minute savings times the number of employees time 360 days per year. With 20 people, that’s two hours per day or about $10,000-$12,000 per year saved for a single task. Apply the same math to the length of shift, and the money really starts to add up.

Be militant about the public safety.

Protecting the public and your employees is priority number one for a business owner. We’ve seen several E. coli and norovirus outbreaks over the last couple of years, and they can be devastating to a business.

Depending on the type of outbreak, the sales declines will be severe, ranging from 20 to 35 percent decrease during the first quarter, 10 to 20 percent second quarter, 10 to 15 percent third quarter and 5 to 12 percent fourth quarter. It takes an additional six months after that to get back to sales prior to the incident.

Be sure that everything that touches the gets is sanitary including tabletops, chairs and condiments on the table. Bathrooms must be spotless. Educate employees to stay home if they are ill and send them home if they come to work sick. In addition, step up training regarding allergies and educate staff thoroughly on the dangers of misunderstanding allergic reactions which can result in death.

By creating highly engaged, well compensated workforce in a safe and sanitary workspace, retention will increase while sales, profits, consumer confidence will skyrocket.


For more information on improving profitability and driving sales, contact AMP Services at rbraa@ampservices.com. Rick Braa is the founder of AMP Services, a Seattle restaurant accounting and consulting firm specializing in helping companies grow profitability.