We had the pleasure of interviewing Jim Taylor, the Founder and CEO of Benchmark Sixty. Read our full interview below to learn more about:
- Restaurant Industry Hot Topics & Trends
- Employee retention
- Labour Costs
- Tech platforms
Here is the full video interview:
ResQ: Hi Jim! Before we get started, please tell us more about your background.
Jim: My background in restaurants comes from operations. I had a long awesome career in operations with one of the bigger Canadian restaurant groups for 20 years. I was lucky to be able to move all over the country and learn lots of different things as well as be exposed to many different opportunities. Benchmark Sixty was started organically mid pandemic because there was an opportunity to really look at helping the industry get rid of this “we've always done it this way” kind of mentality and focusing on things like labor costs, business productivity, and employee workload which are real challenges when it comes to labor shortages and employee retention. At Benchmark Sixty, we work with restaurant operators all over North America to help them innovate and learn how to look at data and information differently so that they can stay ahead and negate rising costs, beat inflation, actually keep people working for them, and find new people to hire.
ResQ: You challenge restaurants to think differently including rethinking labor costs. Can you dive deeper and let us know what you mean exactly?
“Labor cost is a result, it’s not a strategy”
Jim: Labor cost is a result, it's not a strategy. We take a more proactive approach to labor costs. Efficiency is actually about doing more with less. It's about cutting, removing, and reducing things. How that translates into restaurants quite often means cutting, sending people home, as well as laying people off; this often turns into a workload challenge. We look at it from a people centric approach through company wide growth and building . Labor cost is usually addressed with a percentage goal that is to be achieved and working really hard to get to that percentage you want, but unfortunately that sometimes harms employee experience, profitability and sales. Looking at things from a productivity approach, our goal is always to find a 5% improvement in productivity in any business that we operate with. Example, if a restaurant earns 3 million dollars a year in revenue, an overall 5% improvement in productivity in a business that does 3 million dollars a year in revenue will generate upwards of $80,000 a year in annual opportunity. It creates the opportunity to reinvest, improve systems, hire better people, retain good people as well as improve programs and systems internally.
ResQ: Would you define and measure “employee experience”?
“When restaurants measure labor costs as a percentage of revenue, it actually is the number one cause of stress and anxiety in restaurants”
Jim: The strategy that we utilize to measure employee experience is called measuring employee workload. It’s a metric which measures business productivity. But there’s a tipping point to productivity and if we go past that tipping point, it starts to increase workload. If employees work a shift in a restaurant and the section is too big or they have too much work to do, what happens? They start to get stressed and anxious. Through multiple case studies we've found that when restaurants measure labor costs as a percentage of revenue, it actually is the number one cause of stress and anxiety in restaurants! It causes stress in employees, management and customers. Customers can be stressed out by their experience too if their meal takes too long or their service isn't fast. It's tough to measure employee experience specifically but we can measure lots of things that impact employee experience and connect those things to retention turnover.
ResQ: What are some of those untapped areas that restaurant operators can take advantage of when it comes to employee engagement.
“It’s often more about how restaurants manage their customer count rather than how they actually attract customers”
Jim: We did a project with a restaurant group where we selected a dozen restaurants in the midwest of the United States and the result was that every single restaurant had seen positive sales growth in 2021 over 2019. They were seeing positive sales growth both in customer count and average customer spend, but for some reason every single location was facing a challenge in hitting its labor cost target. They weren't as profitable as they were two years ago even though their sales were higher. What we found was that every single business across the company was far less productive in 2021 than they were in 2019. The reason was that an average employee in 2019 had worked for that company for almost two years but in 2021 their average employee tenure was less than 4 months. Their employees weren’t as experienced yet to handle as much workload as they could in 2019. Problems such as how you remove work load from front-line employees and how you remove tasks off the plate of a manager can be solved by companies like ResQ which support them in the duties that aren't necessarily customer service related. ResQ puts together a really clear plan on how to get back to where the restaurant was productivity wise in 2019, which would lead them to being far more profitable eventually.
If we find a restaurant earning 2 million dollars a year in annual revenue, the first thing we do is look at their customer count and the amount of staff it takes to serve those customers. From a growth and building perspective we try to improve the relationship between customer count and staff.
One question we get asked often is “How do you help restaurants improve customer count without spending money?” One example is that we look at the customer that comes to the front entrance of the restaurant and doesn't like how they're dealt with or how long the wait will be and they go somewhere else. It's often more about how restaurants manage their customer count rather than how they actually attract customers. If we use a restaurant that does 2 million dollars a year in revenue as an example, and help them serve 2 more customers at lunch and 2 more customers at dinner, that’s just adding 4 more customers a day on average. When you multiply this number throughout the whole year, it will drop their labor costs by close to a whole percentage point.
We did a case study where we took on the challenge to lower the restaurants’ labor cost by a whole percentage point without ever stepping into their restaurant just by showing them how to manage customer count differently. For example, if we empower the front door restaurant operator not to lose customers at the door, it will improve the total number of customers served each day. The front door staff member is usually the most junior employee who sometimes doesn't have much training and is under pressure, so they might not deal with the customer properly. This is one example of how you can impact productivity in a positive way by not losing the customer at the front door.
ResQ: Many tech platforms and channels of service claim that they help restaurant operators improve operations and cut labor costs, in your experience has this really been the case?
Jim: I think almost every tech platform that I've come across provides savings. Nowadays, we are starting to see a shift in operations because operators are starting to look at things like how their investment in technology is saving them money and what the return on that investment is. A lot of the tech platforms claim that they will save labor costs which they likely will, however, the challenge sometimes is that if it changes things like the service model, it can negatively affect employee experience or how the restaurant deals with the customer. One of the reasons why we believe ResQ is so effective is because it positively impacts employee productivity by giving time back to the operations team.
Restaurant operators have to bridge the gap between technology and operations and this is where Benchmark Sixty can help by using all of the information and data provided by the technology and turning it into strategy.
ResQ: Can you give us an example of when technology had the unintended negative impact on a restaurant’s bottom line?
Jim: Many restaurants now have hand-held POS with their service team and in a lot of cases operators are using that to lower labor cost and increase efficiency. The thinking is “if I give a server an iPad that they can use in their section, it means they don't have to run back and forth to the POS station so therefore they can take a bigger section”. Restaurants assume that their wait staff can take 7 tables now with the iPad vs the 5 tables they were taking before. Therefore restaurants assume they need fewer people which will reduce their labor cost. However, a lot of servers are not comfortable taking orders on an iPad in front of customers which can lead to an uncomfortable and awkward situation and the order taking will take them longer than usual. Sometimes even when the server has a hand-held POS device, they walk over somewhere else (away from the table for example) to take the order. So they still do the back and forth walking. Sometimes if the server is overwhelmed by the POS, they even forget to up-sell different items, add items to the order or even make more errors than they did before because they're less composed. Restaurants might be saving cost in labor dollars because they're using less people but they're losing customers' spending opportunity. We look at technology integration in a holistic way by looking at how it’s helping the business be more productive overall, which then helps us to fix and pinpoint specific areas that need attention so that the restaurants can get the result they want out of it.
ResQ: What’s the one big takeaway you’d like to share with restaurant operators?
“The old way of doing things just doesn’t necessarily work anymore”
Jim: I think that the old way of doing things just doesn't necessarily work anymore. Our industry needs to shift the mentality of “we have always kind of just done it that way”. One of the things we need to rethink is the concept of how productive your business is. This is a little bit new to restaurants but so many other industries like manufacturing use that as a core metric for performance. I believe it’s high time to look at labor costs and productivity differently.
If you’d like to learn more about Benchmark Sixty, or other ways to streamline your operations, check out their website here.
If you’d like to reach out to Jim Taylor directly, please contact him at jim@benchmarksixty.com.
