Improving labor productivity is one of the biggest challenges for the hospitality industry. Earlier research conducted by the U.S. Department of Agriculture found restaurants operating at 74 to 78 percent efficiency, leaving much room for improvement.

The hotel industry treasures old-fashioned qualities of communication, collaboration, and time management like no other, and the increasing downfall in the number of employees with soft skills is compelling businesses to sit up and take notice.

There is plenty of evidence to suggest that productivity in hotels is on the decline. For example, this 2019 report reveals that in the U.K., restaurants and catering sector are first and second when it comes to labor productivity.

Since it is a labor-intensive industry, with little to no technology substitutes for people, this is an alarming situation for many restaurants.

The Hidden Cost of Employee Performance For Hospitality Industry

Salaries are only a part of restaurant labor costs, which also include the hidden cost of “employee performance.”

Simply put, what the restaurant pays for each unit of labor sometimes differs from the value they get from these individual units.

That’s why it is crucial to develop and implement key performance indicators (KPIs) that measure the employee’s output as well as their attitude.

The right KPIs will let managers know how friendly their staff is, as well as divulge important information on their appearance and speed of service.

Creating a more efficient working environment even with a smaller staff isn’t unheard of—it just takes an understanding of job functions and outputs, as well as a consistent approach to measuring employee productivity.

Here are the top ways to measure workforce productivity of employees, ensuring that restaurant businesses can move towards more cost-efficient activities.

Set a Baseline

Establish a starting place to measure productivity—this can be done by using an operation output for a period to set an average. This number is divided by the number of employees for the entire business or individual department to create a stick to measure everyone.

Such a universal measure like ‘total revenue per worked hour’ can help managers learn how the workforce performs on a daily, weekly or even monthly basis. Data for this can quickly be garnered through workforce management software.

But it is essential to understand that this indicator may be affected by some unavoidable factors such as staff meetings, and rush hours, etc. Consider these issues when analyzing the final results.

Remember, it is better to have simple, less accurate but still meaningful baseline, then a complicated and accurate one that no one wants to understand or use.

Define the Tasks and Targets

More than 50 years ago, Peter Drucker introduced managers to the
“knowledge economy,” asking them to narrow down the tasks as much as possible. It is something managers in the modern-day hospitality industry must also do.

Later these metrics should also be discussed with the concerned employees. Eighty percent of the American workforce feels stressed out because of ineffective communication, don’t let that be the case for your teams.

It is important to communicate expectations to each member of the workforce so they know precisely what’s expected of them. After all, would it be fair to measure tasks when the workers don’t even understand what it means to be productive?

Determine appropriate comparisons

An employee’s workday can’t always be measured by the activities performed. That is why the entirety of their job function should be measured.

Typical job functions on any given day could include a diverse mix; for example, a restaurant manager could also have to hire people, coordinate operations, manage budgets, and check inventory. The fact remains that multiple activities determine how productive an employee is in the workplace.

Compare one employee’s daily task sheet against their peer group to understand the average for the job, the top workers, and the best practices for their department. This information can become the standard against which appropriate comparisons can be made.

Find Redundant Routines

Comparisons will bring to light redundancies that are keeping the productivity down.

For example, the staff might have to make multiple trips to the storeroom every day to fetch supplies. The solution could be to stock every floor or every department with the necessary tools to ensure that they have everything they need to deliver stellar services.

This will enhance productivity and customer satisfaction while reducing redundancy and wastage of time.

Track Progress of Each Unit Separately

A predetermined baseline and the identification of redundancies pave the way for tracking individual progress.

This is where managers can quickly identify the productive employees as well as the high achievers and the underperformers. Tools like timesheets and tracking software can help you highlight patterns of productivity in comparable groups.

Ask for Regular Updates

Daily updates from employees make them an active participant in the accountability process.

However, some people may consider this micromanagement, and the fact remains that it can be challenging if not downright impossible to ensure productivity without daily reporting.

Regular updates can help the workforce get over procrastination and serve as a motivator, helping them stay on pace with their professional goals.

People are an intrinsic part of the hospitality industry, making it vital for managers to understand and implement the key drivers that can boost productivity. However, it is also essential to factor-in unrealistic expectations, delays, and lack of engagement as issues that can contribute to low morale and lack of productivity in the workplace.

Ultimately, shifting expectations of productivity mandate demonstrating the real value of how each employee’s hard work line up with their employer’s expectations.

John Kearney has more than 20 years experience working for a variety of high-growth technology companies across Australia and North America. John has a passion for technology and proven track record of building strong, solutions focused sales teams. Currently the General Manager of Asia Pacific at Deputy. He owns the responsibility of managing and growing our current community of 180,000 workplaces and the more than 1 million shift workers they manage using the Deputy workforce management platform.