Major restaurant companies tackle labor, tech at ICR
Ruth’s Chris CEO Cheryl Henry on the ICR stage. She said labor is proving a challenge, but constant training and retraining helps keep people invested.
Labor is still the biggest headache across the consumer brand spectrum, turnover continues to rise and there aren’t a lot of new levers to pull. Some companies are looking to pay employees more, beyond the minimum wages that keep ticking up.
Taco Bell made plenty of news when it announced the testing of six-figure management salaries. And two non-franchised brands are making a lot of noise around higher wages, which will push those in the franchise space to at least compete with them, if not follow right along.
Washington, D.C.-based &Pizza made paying a living wage a core part of the brand, and the buzzing Torchy’s Tacos has turned to a managing partner program to get buy in.
That’s something many franchised groups do to retain top talent, but at Torchy’s, managers can invest $15,000 in the company and agree to operate a specific restaurant for at least three years. In return, they get 7 percent of operating profits on top of their salary.
“Our goal was to get them north of six figures; we need lots of people to grow our company to scale,” said CEO G.J. Hart. “We’ll soon have all GMs in the program.”
In markets with brands like this, franchised concepts run a real risk of losing top workers, but perhaps a more cost-effective way for operators to cope is to focus on training.
At Urban Air, a franchised active entrainment concept with 30 attractions from trampolines to climbing walls, continual affordable training is key. For the generally high school-age employees, training must be cost effective because those employees likely aren’t there for the long haul. But they can learn the system and maybe some key soft skills before they move on.
“We have an online training university, so it takes the expense of training down,” said CEO Michael Browning. “Typically, it’s juniors and seniors in high school, so let’s teach them responsibility and how to work hard. Let’s teach them in 10 feet to look customers in the eye and at 5 feet, you should be greeting them.”
He said providing training online that’s easy to navigate gives employees the option to get it done when they have time, without constantly holding different sessions.
At Black Bear Diner, training keeps the mostly scratch cooking kitchens humming, and also improves retention, as former CEO and now chairman Bruce Dean said. “The more you train people, the more likely they are to stay.”
That’s exactly what Ruth’s Chris CEO Cheryl Henry sees, and it makes key employees proud of what they’re doing, too. Plus, it helps ensures operational excellence.
“Our broiler chefs are one of the most important chefs in the back of house, they cook all our steaks. People come to Ruth’s for many reasons,” said Henry. “But they come for the steak and it has to be right every time.”
The brand’s broiler chefs are recertified every 60 days because broiling a 2-inch bone-in steak is not an easy task. But successful certification, Henry said, keeps those chefs proud to work in a very hot and very difficult role. The average tenure of a broiler chef is just under 10 years.
Tech sea change continues, frothily
Technology, of course, is another major undertaking for retailers of all stripes. From smarter kitchens to impressive guest-facing technology, apps, chatbots and robots, 2020 might not be Jetsonian, but it will certainly be a year of big tech change.
Again, non-franchised brands are demonstrating what can be done. Kura Sushi, the robotic robata restaurant out of China, has just 24 locations in the U.S. but several hundred in Japan and puts robotics at the core. Rice is handled almost entirely by robots, customers bus their own dishes by dropping plates into a slot (and getting prizes for eating more and more) and cameras spot issues, alerting the home office that the restaurant needs to take action.
That means lower food and labor costs, allowing the company to reinvest in higher-quality food. It also means lower turnover, as low as 45 percent in some locations, and no need for extensive training for sushi chefs.
But for concepts that can’t just bring an entire robotics and AI suite into the restaurants, there’s plenty of white-collar automation. One solution pushing the envelope is BOHA, a new product from TransAct that offers a large suite of back-of-house automation. It’s a collection of sensors for coolers, label-making machines to take the guesswork (and all the blue painter’s tape) out of the process, and a handheld device to take temperatures of food-holding systems. Namely, it makes life easier for managers, but CEO Bart Schuldman said users have seen increased quality, too, because with clear labeling, nothing past prime is hitting the plate. It also acts as an “insurance policy” on major equipment like coolers just by measuring temperature.
Workers “were walking in and out all the time, so the temp profile was all over the place, so his compressors were going all day,” said Schuldman as he related one customer example. “So he put some rubber hangers up, and put an hour limit on opening it. So, it’s saving time and money.”
And if something goes wrong, the system alerts the manager or owner, so hours later they don’t open the door to find a dead cooler and a mass of spoiled food.
Presto, known for its table-top payment solutions, is also leaning into more advanced technology that can enhance front-of-house solutions, including computer vision that utilizes ceiling cameras.
“We can study a lobby wait time, we can study sections of the dining room to make the server flow more productive and we also check for aberrations happening in operations,” said Vice President Randy Kies. “Let’s say there is a slip or fall, that would be captured. But what about un-bussed tables? It can send an alert to a manager. Or what if there’s a growing queue at the host stand? It can alert managers to go help alleviate that.”
And the new version of the handheld devices keeps order flow manageable. Instead of the average five trips to the service station, servers key orders in at the table in real time.
That means there’s not a surge of tickets hitting the kitchen or bar at once, also alleviating wait times for diners, an increasingly important factor for casual dining customers.
While there are certain to be plenty of big trends to watch in 2020, training and tech are two areas that deserve a lot of focus because if your brand isn’t winning on those fronts, another one will.