High tech takes on big labor

Stuff you can use right now to ease your workforce woes.

The restaurant industry’s transition from a labor-intensive, high-touch enterprise into a high-tech, production-driven machine is in full swing. Hardware, software and all manner of artificially intelligent devices are doing more of the heavy lifting—in the back of the house, the front, at the table, in the drive-thru, on the Web; in fast food, casual and fine dining.

Why? Because technology is effective, affordable and available.

And employees aren’t.

The statistics are sobering: According to the National Restaurant Association, foodservice is the country’s second-largest private-sector employer, with a current workforce of 12.8 million. Within the next decade, an additional two million new positions will need to be filled to sustain the industry’s growth. If you think it’s tough finding and keeping employees now—and operators in every segment pegged that as their top challenge in NRA’s 2007 Forecast—just wait.

“The rate of growth for employees in the industry over the past 10 years and for the next 10 years will surpass that of the national labor force,” notes Hudson Riehle, the NRA’s senior vice president of research and information services. “We’re now into our sixth year of economic expansion and the underlying labor demand is still positive on a national basis. At the same time, one of the prime demographic groups employed by restaurants—16- to 24-year-olds—is forecast to not grow at all. With the pool increasingly shallow, we’re finding more operators report they not only cannot expand existing operations, but, in many in-stances, are deferring opening new units in some markets because of lack of available labor.”

That’s where technology comes in.

The tech trend that started in the kitchen with “smart,” programmable, high-speed, labor-saving equipment has moved to the front-of-the-house and even into customers’ hands. Operators say the results are worth the considerable investment in technology; it’s not that they’re necessarily able to lose an employee, but they do see shorter training times, tighter staffing, an ability to reallocate labor, faster service times, improved accuracy and enhanced product quality among the payoffs.

Do it yourself

Much of the buzz in restaurant technology is about transitioning certain fundamental tasks, ordering and payment in particular, from employee to guest. The quick-service and c-store foodservice segments are blazing this trail with options like self-serve kiosks, both inside and in the drive thru. They’ve been in test for years and are still the exception, in part due to operating costs that can range from $7,000 to $25,000 per kiosk.

NCR Corp.’s new Xpress Order and Pay kiosk represents the new breed of self-serve stations. It stands 55 inches high and 20 inches deep. Using an intuitive 15-inch touch-screen display, customers place their orders in the language of their choice and pay without any human interaction at all. The machine can be configured to accept credit and pin-debit cards, as well as cash and checks. Integrated directly into the operation’s POS system, orders are delivered straight to the production area and sales data is immediately available to management. The system presents appealing, multi-media displays of up-selling opportunities, such as new products or promotions, and at every step along the order process customers are given prompts to both speed the process and build order size.

Not only are kiosks a boon to operators, who report fewer errors, bigger check averages and faster order processing times when they’re used, they’re also embraced by tech-savvy, convenience-driven diners. Consumer research done by NRA found that half of all adults and roughly two-thirds of those aged 18 to 34 say they would use self-serve technology at a QSR to order and/or pay. And 46 percent say they’d use it at their favorite full-service restaurant if it was available. Among younger Americans, the percentages rise: In the 18- to 24-year-old crowd, nearly three-quarters said they’d use such technology in full-service restaurants, and among 25- to 34-year-olds 64 percent said they’d do so.

From strictly a labor perspective, kiosks and other self-serve technologies are no silver bullet. Rather than eliminating positions, they’re more likely to lead to reallocation of employees. “McDonald’s tried self-service several years ago, with the goal of removing people from the counter and moving guests through the restaurants faster,” says Daniel J. Connelly, PhD, an assistant professor of hospitality and information technology at the University of Denver. “They were indeed able to get more people through faster, and because customers were in control they ordered more stuff. But that, in turn, increased demand for more labor in the kitchen. So they didn’t end up with a net savings on labor, but they were more profitable because volume and average checks rose.”

The upside:

  • Customers do the work
  • Increases production/efficiency
  • Reduces error

Pay at the table 

In addition to placing their own orders, restaurant patrons are also more likely today to settle their own tabs. Pay-at-the-table (or curb, or door) technology is already pervasive in Europe and Canada, and is now making inroads in the United States. While reducing credit card fees via PIN debit processing and curtailing fraud are key drivers, this one delivers service and labor benefits, too.

“When a guest is ready for the check he or she signals the server, who delivers the bill along with the terminal,” says Don Sellazzo, senior account manager at Ingenico, the company behind Pay@Table wireless payment systems. “If the guest is paying with plastic, the server introduces the terminal and invites the guest to swipe their card and complete their transaction when they’re ready. They’ve replaced multiple back-and-forth trips traditionally required to present the bill, collect a credit card, process the card and return the card and the receipt to the table.”

Sellazzo adds that operators using the wireless payment terminals report higher tips, presumably due to fewer miscalculations thanks to built-in tip guides, and faster table turns as guests settle up on their own time instead of on the server’s. “We’ve documented a 33 percent reduction in the amount of time it takes a server to settle a bill,” he says.

A further labor savings comes at the end of the shift, when servers typically spend time closing out checks and doing tip adjustments. When pay-at-the-table systems are integrated into a POS system, checks are closed out and tip adjustments are done automatically. Servers simply clock out and leave.

The company declined to provide cost estimates, but says a range of $500 to $1,200 per unit is feasible depending on the number of units ordered and the volume of payments made through them.

The upside:

  • Customers do the work
  • Increases production/efficiency

Wireless order taking 

At Bondi Bar & Kitchen, a new Australia-themed “premium casual dining” spot in San Diego, CEO Julian Heppekausen says his growing chain has found big labor savings in hand-held, palm-sized wireless ordering units.

“Getting orders directly into the POS system and to the kitchen and bar from the table eliminates servers having to walk back to a central terminal and face a bottleneck there while they wait to enter their orders,” he says. “They’re more efficient, able to spend more of their time on the floor taking care of guests and, indeed, able to handle more tables. Ten employees can service our entire restaurant, which seats up to 325.”

The wireless units are multi-lingual and multi-functional. Beyond speeding the order process, they virtually eliminate errors, Heppekausen says. “You can download exact recipes, ingredient details, nutrition and allergen information, pairing recommendations, even photos of plate presentations. Servers can drill down to the nth degree. And the system prompts them to read each order back to verify accuracy before they hit send.”

They also serve as pay-at-the-table devices. Credit cards are swiped through a slot at the top and processed on the spot, as are loyalty and gift cards.

They’re also great “line busters,” used by employees in shops like Starbuck’s and Dunkin Donuts to take orders from guests waiting in line during rush periods. By the time those guests reach the counter, their orders have already been processed. They simply pay, pick up their items and go.

Lisa Wilson, managing vice president of ASI, which manufactures wireless hand-held Write-On Handheld POS systems, says prices for such systems vary greatly depending on volume and configuration. “In general, for the cost of the equipment and the additional training needed to get employees up-to-speed, operators can expect to pay 20 percent more for a wireless handheld POS system than for a traditional touch-screen POS system,” she says. “The payback comes in increased server efficiency, higher check averages and faster table turns.”

The upside:

  • Increases production/efficiency
  • Reduces error

Web-based scheduling 

Bondi is also set to implement a new online scheduling system that Heppekausen says will further help reign in labor costs. “It’s a Web-based system that gives the staff access through a portal to their schedules and lets them request changes or trade shifts online. If you can save half a percent on labor because you have a more efficient scheduling system, that’s real money.”

Paul Armstrong, chief technology officer at MICROS Systems, says such systems can help attract and retain workers: “Restaurants compete for a fixed amount of labor. Whatever employers can do to provide an attractive working environment just makes sense.”

MICROS just debuted a tool called mylabor. It’s accessible from anywhere and, in addition to the scheduling features available to staff, it provides a host of management functions. For example, it tracks in real time all the labor costs in each unit of a chain. Managers and executives can at any time check labor costs against food costs. The system sends automatic e-mail alerts if employees are approaching overtime so scheduling adjustments can be made. And it tracks all scheduling adjustments so operators can be sure they’re complying with employment laws.

The upside:

  • Increases production/efficiency
  • Reduces error
  • Employee perk

Logging on to-go

Islands Restaurants, a 60-unit casual beach-theme chain based in Carlsbad, California, launched a curbside takeout program just over a year ago. It now accounts for about 8 percent of sales. This summer, Web-based ordering was introduced via a program the company devised internally with the help of a third-party developer. “Customers click on the takeout section of the Web site, choose their location, indicate what time they’d like to pick up their order, customize the order any way they want and pay for it with a credit card,” says John Townsend, director of corporate services. “It’s then transmitted directly to the appropriate restaurant’s POS system, which fires off an order with a designated lag time before that guest is scheduled to arrive.”

In addition to placing orders and paying online, Islands’ system lets customers enter a description of their vehicles. “Our designated takeout employee has a video monitor showing the curbside takeout parking spots and knows which car to run the order out to.”

Townsend says the system cuts down on labor required for the curbside program. “Because everything’s done online, we need fewer dedicated takeout staff members,” he notes. “Nobody needs to field those calls, or enter the orders, or run back in with a credit card to process payment. It’s just one trip out to the car to deliver the food.”

Similar results are cited with new cell phone mobile ordering systems. Nearly half of Domino’s Pizza units nationwide, for instance, now accept orders placed by customers with Web-enabled cell phones text messaged in on “mobile.dominos.com.” Similar to the chains existing Web-based ordering system, this offshoot is designed for the small screen of a cell phone. Once they’re logged in, customers can enter their Domino’s online username and password and all orders saved on the system carry over to their mobile devices. If paying by credit card, they simply enter their information over a secure network. 

The upside:

  • Customers do the work
  • Increases production/efficiency
  • Reduces error

What's ahead?

More high-tech solutions are definitely on the menu going forward. Guests increasingly will accept them and come to expect them. And operators increasingly will depend on innovative high-tech solutions to enable them to do more with less.

What’s ahead in this brave new foodservice world? In the kitchen there might be something like Hyperactive Bob, the much ballyhooed “artificial intelligence” unit from Pittsburgh-based HyperActive Technologies. Bob monitors and then predicts customer flow all day. Managers no longer guess how many folks to staff or how much food to prep. Bob tells you.

In other areas look for more rapid adoption of contactless payment via smart-chip- enabled cards, key fobs and cell phones. Guests ready to pay? They’ll just wave their cell phone in front of a reader and be on their way. Bank transactions and loyalty program info is automatically entered. Credit card companies like Visa, with its payWave cards and key fobs, are leading the way toward enabling a truly cashless society.

Also expect major tech-driven strides in HR. Virtual job fairs and tech-based screening systems will increasingly help with recruiting and retention. And more training will be done in a virtual environment, according to Jasper Ho, a consultant with Potomac, Maryland-based Accuvia. Common tasks in restaurants, he says, will be emulated by user-controlled electronic representations of themselves, called avatars. Rote tasks within training processes will be turned into a game for trainees to master before they jump into real-life training.

While digital and animation are the buzzwords right now in menu boards and displays, those technologies ultimately could wind up enhancing tableservice menus, in the form of interactive tablet PC-style devices. San Diego-based software developer Ameranth teamed up with Motion Computing, Microsoft, Intel and Dell to develop just such an E-Menu prototype. Tested in 11 Holiday Inn restaurants, the clipboard-sized tablets had a 12-inch screen, integrated wireless capabilities and a stylus. Diners could browse the menu, customize selections and place orders directly into the kitchen. The E-Menus could be updated in real time, enabling the chef to highlight specials or make changes. Photos and nutritional information for each menu item, as well as tax and gratuity calculations in multiple languages, were included. The E-Menus also provided Web access, games for kids, and local travel information.

“At $1,000 or more per unit, cost is still prohibitive,” notes Ameranth’s Keith McNally, “but for niche restaurants or those that really want to make a wow statement with technology, there could be future promise.” Also ahead: Interactive menus built into the tabletop; Microsoft’s Surface technology is the pioneer here. In the future, ordinary tabletops will be turned into dynamic experiences for guests to interact with all forms of digital content, such as menus, nutritional info, wine pairing suggestions and their bill, plus games and Web access.

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