4 Strategies for Thriving in a Higher Wage World

Ready or not, wages are rising, fast.

Between California’s minimum wage surging to 20 dollars an hour and the rise of National Minimum Wage in the UK, hospitality leaders far and wide are finding themselves caught between a rock and a hard place.?Price hike or headcount cut? Choose your own adventure.

Navigating wage hikes this substantial calls for a nuanced and methodical approach. Beyond the traditional plan of action to raise menu prices or reduce labor hours, we’ve rounded up 4 unique strategies from expert operators sharing their recipes for profitability and labor success in 2024.??

1. Reengineer your labor equation ??

Leading brands are analyzing their labor equations with a holistic and strategic lens to drive profitability and establish a safeguard against the impact of rising labor costs.

"We're helping the best operators systematically address the compounding cost of labor at its core," Harri CEO and Founder Luke Fryer explains.

Leveraging AI for accurate demand forecasting, optimizing labor deployment, and enforcing schedule adherence, among other strategies, make all the difference. Learn Fryer's 7 key “angles of attack” that collectively move the needle in his recent LinkedIn post.

2. Tackling turnover ??

Labor costs have risen by 70% at Snooze an A.M. Eatery since 2018. But Snooze CEO David Birzon , said it best: “The reality is if we could cut turnover to zero, we don't have a labor problem.” Wage inflation motivates Snooze to think even more strategically about how to improve employee satisfaction and prevent turnover.

“How do you connect with today's workforce?" Birzon asked the audience at Restaurant Finance Monitor 's RFDC. "How do you actually create an environment where they feel like they're getting their needs met by us in today's world? It really is about leadership and development. People want to feel like they work at a place where they're moving forward, not just standing still.”

Check out this Restaurant Dive article to explore why Harri customers Snooze and Savory Fund say retention is the key to labor profitability.

3. Invest in your people ??

Similar to Snooze, Fogo de Ch?o is all about prioritizing the employee experience.

“Those that aren’t reinvesting in their people, their culture, and their guest experience are the ones who are fading away. Those are the ones that are having problems. So our industry is going through a renaissance that’s healthy. We’re getting better.” - Barry McGowan , CEO

At the end of the day, operators will have to embrace this change and can use it as an opportunity to invest in their people, improve retention, and develop their teams. Operators Juancarlos Chacon of Jersey Mike's Subs and Mike K. of 麦当劳 recently spoke to this on our webinar with QSR . Hear their insights on demand here.

4. Cut through compliance complexity ??

Seemingly minor compliance oversights can expose you to millions in fines and premiums. Navigating compliance is complex, but technology can help you reduce risk, save time, and gain peace of mind.

Here’s how a few of our customers have done exactly that:

“Since implementing Harri in early 2023, we have experienced a 53% reduction in overtime spend. Harri makes managing overtime and optimizing staffing levels so much easier for our frontline managers.” - David Buffinton , General Counsel and EVP at Akash Management

"With 40 locations across the UK, a key feature that influenced Pho’s decision to use Harri was the seamless integration with Trust ID, an identity checking service. This saved the Pho team countless hours by enabling them to automate the assessment of candidates’ right to work." - 3Sixty Insights

Cut through compliance complexity with your go-to checklist.

Take home tip: cutting costs in the kitchen ??

While you likely aren't managing labor costs in your home kitchen (though who wouldn't love a private chef!), you're almost definitely facing another challenge: the pinch of rising grocery costs. But here's a simple, yet effective tip to minimize sticker shock: ignore the logo and and go for the product with the lowest unit price. Don't worry about sacrificing quality. Rest assured, even chefs do it!

“The reality is that most of the time any differences are going to be minimal and ultimately unimpactful to the outcome of your meal. " - Nate Weir, VP of Culinary at Modern Market Eatery

Until next month! ??

Looking to explore the employee experience platform used by industry leaders like Modern Restaurant Concepts, Snooze Eatery, and Pho Restaurant in the meantime? Join our 2024 Spring Release Webinar for a sneak peek into how Harri can help you hire great people faster, create a connected workforce, and simplify scheduling, and so much more. Save your spot here today.