Waitress with tablet

3 Ways to Protect your Restaurant Against Minimum Wage Increases

In recent months, we’ve witnessed several unintended consequences of minimum wage hikes in restaurants across the country. In my previous blog, I studied the emerging reports and how restaurants have been affected by these wage increases. What should you do about it? To remain profitable with rising workforce costs, you’ll need to adapt. Here’s how:

Automate to save time and money

Automation should be a key business strategy—use it to tweak processes so that your team can concentrate on the human elements of their jobs. I was talking to a friend recently, whose 95-year old British grandmother was reminiscing about how when she was young, there existed a job called a “knocker-upper”. This involved a person walking down cobblestoned streets before dawn with a large pole and whacking it against the bedroom windows of mill workers to wake them up. Entire jobs were wiped out by the invention of alarm clocks—but did people sit in the gutters and mourn the change? No, society adapted.

Automation has infiltrated our daily lives in countless ways and benefited us tremendously—and you can use it in intelligent ways in your restaurant to cut costs. First, figure out all the processes that can be automated, then implement smart technological solutions such as modern mPOS systems that will free up your workforce to do the interesting tasks that small electric boxes can’t do.

Befriend customer self-service

In 2014, Fast Company stated that “the future of customer service is self-service.” They were right. Customer self-service may be the most compelling solution out there for restaurants. As customer expectations rise, they want more personalization, less stress, and more control of their transactions.

Forrester’s report, 2017 Customer Service Trends: Operations Become Smarter and More Strategic lists ten top trends to watch in customer service this year and the first three are related to operations becoming smaller: 1) self-service and digital interactions, 2) automated conversations, 3) innovative labor models.

Now, for the tech-adverse out there, bear in mind that self-service isn’t a revolutionary 21st century concept. It’s been around for a long time and 100 years ago it revolutionized the grocery store industry when Piggly Wiggly opened in Memphis, Tennessee. For the first time, customers didn’t need to order everything through the clerks standing at counters; they could walk themselves through the store and pick out what they wanted.

This is the trend we’ve also seen take off (quite literally) in airlines—where self-service check-ins have become the norm and indeed preferred by most travelers. Customers on the whole prefer to just do it themselves, even when it doesn’t necessarily increase the speed of service. The same trend has been occurring in grocery stores. According to an Allied Market Research report, the global self-service technology market will see a compound annual growth rate of 14% from 2015 to 2020.

Here at Instore, we’re building ways for our retail and restaurant customers to weave this trend into their daily operations—with clever table-top tablets and kiosks for customers to order and pay quickly and accurately, freeing up your team’s time. Early results in the marketplace suggest self-service has the added benefit of increased ticket size, a very encouraging indicator of the value of this technology.

Be personalized in your marketing

Finally, one of the leading studies on the effects of higher minimum wage at restaurants reveals a key fact: restaurants feeling the most impacts from wage hikes are the ones who garnered 3.5 star reviews on Yelp. Those with five-star ratings were less impacted by the wage hike. Focus on excelling in customer satisfaction. The new generation of diners expects personalization when you interact with them—so make sure your point of sale system is capturing data so you can recognize them when they visit, and reward them with gifts for their loyalty.

By automating, increasing customer self-service, and using smarter tools, you can reduce cost, drive efficiency, and improve the customer experience. This will set you up for long-term growth and resilience in the face of ever-changing industry conditions.

Photo copyright: NatashaFedorova/ depositphotos.com