Labor shortages have hit the restaurant industry hard over the past couple of years, leaving many establishments struggling to hire qualified staff members. In addition to the difficulty of finding employees, restaurants are also facing increased labor costs and high turnover rates.
Savvy restaurant operators are increasingly turning to new technology solutions to help them overcome these challenges by streamlining and automating their restaurant processes. Which effectively allows them to serve more in-house and off-premise customers with fewer staff members.
Labor challenges faced by restaurants
Difficulty in finding and retaining qualified staff members
The restaurant industry has a reputation for low wages, which makes it challenging to attract and retain skilled workers. In the post-covid world, where businesses are struggling to earn, and people think twice before spending - retaining their best staff members is seen as one of the most significant challenges.
According to Toast’s Restaurant Success Report 2019, 51% of restaurant operators name staffing as a top challenge that’s affecting their success. As per the 2023 State of Restaurants report this trend has not yet improved as 97% of restaurants reported being short-staffed in 2022.
High turnover rates
The restaurant industry has always had a high turnover rate - at 75%, turnover in the restaurant industry was at an all-time high even before the pandemic exacerbated the issue. According to a survey by the National Restaurant Association, the industry's turnover rate reached 110% in April 2021, meaning that for every 10 employees hired, 11 left the industry. High turnover rates are costly for restaurants as they have to invest in recruiting, hiring, and training new staff. Without staff stability, it is also hard for restaurants to retain their culture and customer satisfaction.
Increased costs of labor
The labor shortage has driven up the labor costs for restaurants as they compete to attract and retain employees with higher wages and benefits. According to the National Restaurant Association, 68% of restaurant operators reported that labor costs as a percentage of sales increased in 2021. Some restaurants have been forced to raise menu prices to cover the increased labor costs, which is risky as this can lead to decreased customer satisfaction and reduced demand.
The role of technology in addressing labor shortages
QR code ordering system
QR ordering offers a convenient and efficient way for restaurants to manage their tables effectively with fewer staff members. QR codes make it easy for customers to browse menus, place orders and pay directly from their phones without needing a server. This is especially helpful during rush hour or when staff is limited as it allows restaurants to serve more customers with fewer staff members without sacrificing quality or efficiency.
QR codes free up servers to focus on hospitality and building connections with guests rather than transactional tasks like taking orders and processing payments. By using QR codes to automate certain tasks, restaurants can provide a higher level of customer service and attention to detail. This can lead to increased customer satisfaction and loyalty, as guests feel valued and appreciated.
Popular brands like Starbucks, TacoBell, Chili’s, and many others have embraced QR codes in the most creative ways. Here’s an example of how McDonald’s uses QR codes on its social media to motivate users to order and pick up their food from the nearest McDonald’s store.
Streamlining delivery orders with automation
Focusing on to-go and delivery orders helps restaurants increase revenue, especially during off-peak hours when restaurants may have lower foot traffic. Automating the processes behind managing these online orders can be a game-changer for restaurants looking to scale their off-premise sales as it helps improve delivery times, reduce order errors, and increase customer satisfaction.
By ensuring a streamlined and convenient ordering experience for customers, restaurants can build a more substantial online presence and reputation, eventually attracting new customers and driving repeat business. Chipotle has implemented online ordering and delivery platforms, which has helped to increase sales and improve efficiency. The platforms also provide real-time updates on order status and delivery, which can improve the customer experience. Pizza giants like Papa John’s and Domino’s self-service kiosks can be set up in restaurants or other locations, allowing customers to place orders and pay on their own, helping reduce the need for staff and improving the efficiency of the ordering process.
Using POS integration software can help automate order processing and menu management. By eliminating delivery tablets and having online orders received automatically accepted, formatted into your restaurant's standard ticket format, and pushed into your existing POS restaurants can free up staff members that would otherwise have to monitor delivery tablets and re-key these orders in manually.
In conclusion, the restaurant industry is facing unprecedented labor challenges, but technology is providing a much-needed lifeline. QR code ordering and automating online orders are just a few examples of how technology is helping restaurants improve efficiency, reduce costs, and provide a better dining experience for their customers.
Restaurants that embrace technology can expect to see improved profitability, increased customer loyalty, and a stronger position in the marketplace. As the restaurant industry continues to evolve, it's clear that technology will play an increasingly important role in shaping its future.
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