Researchers have now confirmed what restaurant servers have known for years: last-minute scheduling takes a toll on worker productivity.
Labor and inventory are the two largest variable costs that a restaurant faces and many leaders in the food service industry have been incorporating various forms of flexible labor scheduling to try and keep costs down. The idea is to have just-enough servers on hand to handle the restaurant crowd for the night but not too many.
The practice is often referred to as “just in time” scheduling. And while it does appear to be effective in cutting costs, it also often leads to unpredictable schedules for workers. After negative press coverage of the issue, several cities and one state (San Francisco, Seattle, New York, Chicago, Philadelphia and Oregon) introduced legislation requiring predictable schedules with at least one- or two-week advanced notice of schedules and premium pay for last-minute adjustments.
Now, a recent study by researchers from Georgia Tech, Indiana University and the University of Washington provides additional food-for-thought (no pun intended) to avoid last minute scheduling changes. The research suggests that when restaurants use ‘real-time’ scheduling for employees, it hurts the bottom line in significant ways. At the restaurant chain that was observed during the study, the practice resulted in checks that were 4.4 percent smaller.
“While real-time scheduling may appear very appealing for managers because of the high-degree of flexibility it offers, this appeal diminishes when considering its negative impact on server productivity,” the researchers wrote.
To reach that conclusion, the researchers examined data from 1.4 million transactions that took place during nine months in 2016 at 25 locations of a casual restaurant chain in the Pacific Northwest. In addition to the transactions, the data set included information on the waitstaff’s individual work schedules.
The restaurant chain posted the server schedules one week in advance. But, those schedules would change as managers adjusted worker hours closer to the day of service to adjust for the supply-demand mismatch in labor needs.
Two commonly used adjustments were “short notice” changes and “real-time” changes. In the former, servers were typically asked a couple of days ahead to work different hours. On the other hand, servers who received “real-time” scheduling changes were being asked to change hours during the shift in question, which typically meant staying longer.
The short-notice changes (again, managers asking about two days ahead of time) had no effect on servers’ transactions. But, the real-time changes led to less revenue. Transactions for tables served by wait staff who’d been asked to stay longer decreased by 4.4 percent on average.
Based on the analysis, the researchers surmised that the drop occurred because the servers reduced their efforts in up-selling and cross-selling during the real-time scheduling.
In addition, the researchers noted that the real-time schedules’ lack of advance notice “induces a strong schedule unpredictability effect and the short length of these schedules does not provide an income opportunity large enough to offset the inconvenience associated with” being asked to stay later.
The 4.4 percent drop was bad enough but the researchers discovered that the reduction in total check sizes for real-time schedules was worse on the weekends. And, workers with “low intrinsic sales ability” had the sharpest declines in total check sizes (more than two times worse than servers with high intrinsic sales ability).
“We show that with the 4.4 percent productivity loss during the real-time schedules, the manager should consider deploying more regular and short-notice schedules and not wait to use real-time schedules,” the researchers wrote. “Such a shift in scheduling pattern not only leads to more predictable work schedules for the servers, but can also improve the restaurant’s expected profit by up to one percent (an economically significant improvement in the low-margin restaurant business).”
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