The Hidden Consequences of Under or Over Staffing

Mar 31 2017

Restaurant Management Optimize Labor Labor Scheduling

A well-rounded employee schedule is key to maintaining the right balance of customer satisfaction, employee morale and profitability.  This can be tougher than it sounds, however.  Whether you find yourself continually over staffing or under staffing, there are some serious effects caused by both:

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 Overstaffing can lead to:

  • Low profits. Labor is the second highest expense a restaurant incurs after food and beverage costs.  Most restaurants run labor costs between 30-35% of the restaurant's total sales.  Over staffing can quickly eat into your profitability.
  • Underpaid employees. If you start a shift and find out that it is not as busy as predicted, just cut a few people to keep your margins in check, right?  Not if you want to keep your turnover low.  Being cut early and not working scheduled hours means that employees will not make their predicted income, potentially causing them financial issues. 
  • Low tips for servers. Low tables turns leads to low tips, which will also affect a server’s income (even if they stay for the entire scheduled shift).
  • Unproductive employees. Employees on the clock who have nothing to do not only cost you money, it leads to bored employees.  You do not want your paying customers to see employees talking about the party last night, flipping through their cell phone, or sitting in a booth staring off into nowhere.  It’s uncomfortable. 

Understaffing can lead to:

  • Poor service. Your customers can not receive the best possible service if the waiter is stretched too far. Poor service usually means that the customer will not return. 
  • In the heat of a busy shift, mistakes can be made by any staff – not just waiters.  Plates go out wrong, food is over or undercooked, tables are pre-bussed too early, making guests feel rushed. 
  • Stressed staff. The overwhelming feeling of being in the weeds shift after shift can lead to more than individual stress – it often causes employees to turn on each other when they should be working as a team. 
  • Even though the employee’s increased hours may mean more money in their pockets, this does not guarantee that they will stay.  The long hours and stressful shifts can lead to resentment, fatigue and burnout; you may lead employees looking for employment elsewhere. 
  • Skating. As important as side work is for the next shift, it simply will not be a priority to an employee who is just trying to keep his/her head above water during their own shift.  Often, if something has to give, employees will skate on their side work. 

Being able to forecast sales accurately takes the guesswork out of scheduling.  Below are a few best practices for sales forecasting:

  • Don’t rely on your intuition. Also, known as the “gut method,” this kind of decision making will usually cost money rather than generate it. Avoid it. You need hard facts, not generalizations.
  • Start yearly. Look at how you are doing this year vs. last year. Are this May’s sales up 4% over last May’s? Then use last June, July, and August as a baseline for this summer, and add 4% for a good starting point.
  • Factor in specifics. Think about what happened last June, July and August. Was there a major sporting event in your city? Music festival? Art show? Unusual weather? All of these can affect sales. Factor that into your estimate. Now, look forward. What’s coming up this summer that will impact sales? Add that in as well. This is where a detailed manager’s log comes in handy – you don’t have to rely on your memory to recall which weekend the jazz festival bumped up your number of reservations.

Once you have your anticipated sales, start filling in employees not only on their availability, but also on their skills.  It is also helpful to:

  • Set a deadline. Create a deadline for all employee requests to be submitted, then plan a day (or two), and just focus on the schedule.  The more in advance the employees receive their schedules, the less likely they will be to no show, as they have ample time to swap shifts as needed.   
  • Build a mixed roster. Try creating a balance of star employees with employees who could use some help.  It will help to ensure that shifts run more smoothly while giving the weaker employees a good role model to emulate. 
  • Cross train. Cross training employees can help keep the guest experience running smoothly on shifts that are understaffed.  Think a bar back that can run food, or a line cook that can expo.
  • Talk to your employees. Learn who is happy to come in on short notice, or pick up shifts.  That way, you are not feeling the need to overstaff when you are unsure, but can still get help in quickly, should a shift be unexpectedly busy.

And finally, be patient. Customer satisfaction and profitability are hard to perfect. It takes time and practice to get things right.  Just keep slowly chipping away at your labor costs, and soon you will find the right mix.

Jennifer Day

Jennifer Day

Jennifer Day has over 16 years of experience in the marketing and communications field. Before joining the Ctuit marketing team, Jennifer previously worked at a major telecom company and was in marketing communications for a major point of sales (POS) manufacturer and software provider. She brings with her a wealth of knowledge on POS technologies, software and back office systems and the understanding of how they all work together to create a seamless customer experience while increasing profitability.