Cutting Labor Costs at What Expense?

Your editorial [Cutting Labor Costs and Losing Money, January 2011] stirred up quite a debate amongst my team yesterday and I just wanted to share with you our take. There may be some validity to your argument on why there were only two bartenders working on such a busy shift due to a labor focus, but the reality is that the cost of a bartender really is not that much ($3-$10 per hour?). What you experienced, unfortunately, could have been a breakdown in one or all of 3 major areas — employee relations, leadership and management. This is no excuse, but I believe businesses around the world face this and never unmask the real nature of their problems.

First, employee relations: Our system for service is driven by tips. I have faced many conversations with service personnel, balancing their compensation (two bartenders split tip pool instead of three), the guest service and the brand. This leads me to the second area of discussion — leadership. These conversations are not easy but it takes a leader to sit down and listen to the concerns of the employee and balance them with the needs of the guest and the brand. A delicate balance can be reached if approached with respect and focus.

The last piece is management. Proper planning with schedules are a vital part of this equation, which you reference in your article — “sometimes there's no method to the madness of customer traffic.” But an added problem can always arise — someone calls in sick, family emergency, etc. It's management's responsibility to have a back-up plan — perhaps shifting a server off the floor to assist or maybe even a manager assisting in the rush.

One of my guiding principles is that customers will tell you what they want, if we only listen. So staying with that theme, I can see from your article one of the perceptions that could be construed, when approaching a busy bar and operating with only two bartenders. I know labor cost and execution are a balancing act that should never affect the customer. The larger issue is you leaving a restaurant feeling the way you did. I'm in no way excusing this experience. I am just trying to dig deeper into the question/observation/experience. The hospitality business environment today is facing new challenges, but we we can never forget one of its primary missions — the guest experience.

Bill Bessette
C.E.O.
Vapiano USA, Canada, Middle & South America
McLean, VA

Great article! One thing I have had success with in all my years is scheduling an “On Call” shift, which is a designated staff person to call in as I determine whether or not I may need the extra body. As I have always said, “People make you money — they don't cost you money.” When in doubt schedule them. By the way I don't share this with my competitors! Ha!

Jeffery S. Bush
General Manager
Karl Strauss Brewing Company
Carlsbad, CA

We read your article on Cutting Labor Costs and Losing Money, and you're right — there's no rhyme or reason to customer traffic; in a blizzard you're packed and on a beautiful evening you're slow. We are third-generation owner/operators and we always begin our evening fully staffed. The “bewitching” hour for dining in our area is in the 6:30 - 7:00 range. If we don't get busy by that time, we start sending people home. As you stated in your article, “there is no method to the madness of customer traffic.” Customers do not seem to make dinner reservations like they used, so even though the phone might not ring with reservations all day, it doesn't mean we won't be busy.

Mark & Kim Petillo
Owners
House of Petillo
Jamestown, NY