Behind every restaurant is a hard-working owner. Shouldn’t your restaurant’s profitability reflect that hard work?
Part of being a restaurant owner means solving challenges. And while an owner may have success when it comes to customer satisfaction, one elusive challenge often remains unsolved: Profitability.
The restaurant industry has long been known for single-digit profit margins. And with unique challenges brought on by the pandemic, such as forced closures, supply chain issues, and the aftermath of a period of significantly high turnover called The Great Resignation, gaining profitability is more difficult than ever.
Fortunately, restaurants have an underutilized advantage that’s ready to step into the spotlight: HR, accounting, and payroll data.
Here’s a look at how the restaurant industry can use data and analytics to overcome its biggest obstacles to growth and profits:
Challenge #1: Skyrocketing Employee Turnover
High turnover is the norm in hospitality. But according to recent data from the Bureau of Labor and Statistics, quit rates in food services have increased more than any other sector in the past year alone, growing from 4.8% to 6.9%.
Finding your restaurant in high demand while understaffed is not a recipe for success. It’s nearly impossible to provide customers with the highest level of service and product when resources are lacking. That’s why it’s so important that restaurant owners and managers have the ability to quickly hire, onboard, and train new staff members with minimal effort.
Implementing systems that minimize the amount of time needed to get new employees onboarded and trained quickly can help your restaurant keep up with demand and better meet customers' needs. In addition, when owners and managers can reduce the amount of time spent hiring and training employees, they can focus more time on the overall operations.
Challenge #2: Losing Time to Administrative Tasks
A typical business now manages 100 times more data than 20 years ago. With the increase in digital dining and mobile orders, restaurants owners and management are spending more time on administrative tasks due to this shift toward digital operations. Additionally, managing and running restaurant payroll is a complex and time-consuming process due to the different types of wages and pay rates that all come with varying tax requirements.
While most restaurants have digital tools for time tracking, payroll, inventory, and ordering, they are often separate stand-alone systems that require substantial amounts of time and effort to manage and maintain. Relying on manual processes and outdated platforms can create extra data entry work and other burdensome administrative tasks.
Challenge #3: Maintaining Compliance
There are many laws and regulations that the restaurant industry must follow. It can be difficult for business owners to keep track of them all, especially with the additional safety requirements brought on by the pandemic. However, falling out of compliance can mean costly fines.
In particular, I-9 compliance is a complex process, and restaurant owners can easily face issues due to incomplete or incorrect forms, late filing, or failing to retain necessary documentation. With increased minimum penalty rates, ensuring compliance is essential for your bottom line.
Many restaurant owners also struggle with keeping up with Fair Labor Standards Act compliance. With many requirements regarding minimum wages, hours worked, and recordkeeping to meet on Federal, State, and local levels, restaurants are especially prone to violations, which can lead to owing significant amounts in back wages.
In addition, the tools restaurant owners have are often not fully utilized, leaving the potential of customer data untapped and money on the table. It is estimated that 60-73% of all company data goes unused for analytics. Imagine the potential you could unlock if you had visibility into all of that valuable information.
Overcoming these challenges and putting unused data to use is entirely possible with the right systems in place. Human Capital Management (HCM) technology that provides easy access to critical information can help restaurant owners manage employee turnover, stay in compliance, and reduce time spent on administrative duties.
Harnessing Your Data and Analytics Is the Most Important Ingredient in a Restaurant’s Success
Many global restaurant brands are already using data analytics to understand and predict customer preferences to optimize their experience and adjust menu offerings and inventory to increase profitability. Analytics tools can also help smaller businesses by presenting critical spending and revenue data in an easily understandable format.
An HCM system automates and simplifies the tasks associated with employee administration, providing restaurant owners with the information, the time, and the data analysis tools they need to make smarter business decisions. And when paired with your business’s rich existing data, you unlock enhanced analytical and benchmarking capabilities and turnkey reports that show how your business ranks among competitors, along with forecasting tools that facilitate budget planning to help you gain a competitive edge and increase company profitability.
The hospitality industry has experienced an unprecedented change over the past couple of years, and restaurant owners need every advantage possible to succeed. Having a suite of tools that facilitates employee hiring and training, streamlines payroll, compliance, and other administrative duties, and turns available data analytics into actionable insights can provide the competitive edge needed to increase profitability.
PrimePay’s got you covered.
We have a technology that will show you with your accounting data where areas for increased profitability are. PrimePay’s Restaurant Analytics automates and simplifies employee administration and provides restaurant owners with the information, the time, and the data analysis tools they need to make smart business decisions.
Click here to learn more and connect with one of our Restaurant/Franchise experts today.