One of the driving factors in any industry is to ensure that costs are kept under control. By managing costs, a business can deliver predictable profits. And one of the largest costs across the board is labor. In the service industry, in particular, labor makes up somewhere between a third and a half of all costs. This is so significant that the difference between controlling labor costs and letting them spiral can be the difference between success and failure in a business. And this brings a dilemma. Service is crucial to keep customers returning. But labor costs can affect profits. So, we need to look at how to optimize labor without sacrificing service.
There are a few ways of looking at this. Traditionally, increasing labor costs used to mean a corresponding increase in the price for customers. But in a competitive market, this might not always be possible. Plus, technology has allowed us to look at things differently. In this article, we will look at some solutions to ensure that you remain competitive whilst optimizing labor costs. Sounds interesting? Well, read on and see how some tech solutions are helping people just like you in the service industry and in other industries too.
Effective planning is a game-changer
The less you know about your business in advance, the more chaotic it will be. Making decisions close to the time they need action brings turmoil. And this turmoil is inevitably more expensive than making decisions many months in advance.
Staffing is one place where forward planning helps to save costs – paying agency rates or overtime is much more costly than having a planned, well-laid-out staffing schedule. And we’ll look at how HLDS can help make scheduling an art form later in this blog. But we’re not just talking about staff schedules in this section. Delivery of stock or ingredients should be timely and organized. Scratching around last minute for something is another way to increase costs as well as take up a large chunk of staff time. Planning changes everything.
Customers are more used to helping themselves
Taking the lead from retail, there are certain tasks that customers have become accustomed to doing for themselves. Self-checkouts have become a mainstay of retail, allowing one supervising team member to oversee eight self-service checkouts or more. This is a highly efficient way of optimizing labor and doesn’t affect service levels at all.
Now take a look at your business and see which tasks can be handed over to customers to do themselves effectively. In a restaurant environment, this might be the ordering process on an app or tablet. In retail, it might be removing the checkouts completely. HLDS’s automated shop uses LiDAR technology to accurately track customers' movement, see the items they select and automatically bill them – no checkouts involved at all! Think about which tasks in your business can be handed over to customers.
Repetitive tasks can be automated
There are some tasks that take up a big chunk of time but don’t actually have to be done by your team. Entering staff hours or customer information is necessary for the smooth running of a business, but they don’t have to be carried out manually. The less time spent on admin tasks, the more time staff are available for customers.
Technology such as adding a ‘clocking in the system’ for staff to record their own hours (there’s most definitely an app for that!) and a tablet for customers to enter their own information take away from these tasks and allow a business owner to reassign staff from these admin tasks into something more productive.
Outsourcing saves time – And money
And it isn’t just automating some tasks that can help to optimize labor without sacrificing service. Every business has tasks that aren’t necessarily part of its specialism. For example, a restaurant is a specialist in making amazing food and offering a dining experience that keeps people coming back time after time. But how about getting people through their doors for the very first time? Well, this is the expertise of a marketing agency. So, outsourcing this part of the work to an expert marketing agency means three things –
- The restaurant doesn’t have to become an expert in marketing.
- The work gets done professionally.
- Restaurant staff can concentrate on what they do best.
In the modern world of influencers and people sharing their business experiences on the likes of LinkedIn, you would be forgiven for thinking that you need to be an expert in every single aspect of your business. You simply don’t. Finding the right outsourcing partners is essential. And that leads to the next way of optimizing labor without sacrificing service and how we can help.
Scheduling your workforce effectively
We’ve all been there – walking into a store only to see nobody available to help. And then, on the other hand, we’ve all walked into a store and seen multiple members of staff standing talking to each other without anything to do. And this can be the trend in all businesses – service industries in particular. Much of this comes from traditional scheduling systems – basically a pen and a piece of paper.
Technology allows businesses to look at this through the eyes of technology. HLDS’s sensors give real data to allow scheduling decisions that make sense for both customers and staff members alike. The times when a company is paying people to stand around are over. And customers can walk into a store, restaurant, or any other place of business knowing that there will be sufficient team members to assist if needed. This technology allows intelligent decisions to be made – putting staff members in when they are needed. This optimizes labor spending, ensuring the staffing budget is spent wisely.
If you have any questions at all about how HLDS can help you optimize labor without sacrificing service, then please get in touch with us. We are experts in analyzing the needs of a business and delivering the solutions that help drive you forward. Let’s talk.