PRICING PRESSURES: Navigating the Minimum Wage Hike in Hospitality Leadership??

By Karen Turton, CEO and Founder, Purple Story

In 2002, two visionary academics warned that if leadership and management within the hospitality sector failed to innovate, staff turnover would become a widespread issue. Fast forward over two decades, and their cautionary words still echo loudly in our industry corridors.??

It's high time we confronted this ever-present challenge head-on, rewrite the narrative on employee retention in hospitality once and for all, and address the all-too-familiar discourse surrounding "turnover" with the urgency it demands.?

?Adding a new layer to this age-old dilemma is the unprecedented spike in Human Capital costs, with projections by S4labour indicating a potential increase in average pub labour expenses of approximately ￡15,000.??

This stark reality has been a focal point in our recent series of workshops aimed at demystifying the art of driving sales, developed in collaboration with Mark Bentley and Hospitality Data Insights (HDI) .

A critical question we posed to our attendees was whether they could quantify the financial impact of the National Minimum Wage hike on their operations and strategise accordingly to offset this burden through increased sales. Alarmingly, the number of those who could was low, underlining a concerning gap in proactive commercial management among our managers.?

The prevailing mindset of awaiting directives from above is a relic of the past. Today's dynamic business environment demands that managers not only anticipate change but also spearhead strategic initiatives to mitigate its impact.??

At Purple Story, we've devised a pragmatic five-point action plan designed to empower managers to proactively enhance sales performance without waiting for the proverbial baton to be passed:?

1. Chunking: Break down daunting sales targets into manageable milestones. Transform a seemingly insurmountable ￡6,000 goal into bite-sized, achievable objectives, making success not just possible but expected. Most team members will never have had ￡6,000 in their bank, therefore they cannot connect with delivering that number.?
2. Speed: Evaluate and enhance speed of service. Managers must adopt a no-excuses approach to streamlining operations, recognising that efficiency drives profitability and the sooner the food comes off the pass, the more food can come out.?
3. Technology: Leverage tech solutions to elevate efficiency. The underutilisation of features like 'pay at the table' options not only hampers service speed but also squanders opportunities to boost transaction volumes.?
4. Delivery: In the wake of the pandemic, delivery services have woven themselves into the fabric of our society. Managers must capitalise on this trend, maximising both in-house and external delivery capabilities. The conversation now is just as much about how much food is sold outside of the restaurant as is sold inside!?
5. Personal Development Plans (PDPs): Invest in your team's growth. Simple yet transformative, our 'Purple Hack' to PDPs exemplifies how incremental skill enhancements, such as improving a team member's ability to carry an additional plate, can significantly impact operational efficiency (get in touch for more info).??

These strategies are not ground-breaking but they are revolutionary when actioned. The real challenge lies in their consistent, deliberate implementation. The payoff to this investment is to not only alleviate financial pressures, but also create an engaged team less likely to leave.?

Imagine a future where managers proactively present their solutions, transforming the traditional dynamic into a collaborative, forward-thinking partnership. This is not just an aspiration but a necessary evolution for our industry.??

Let's lead this charge as architects of change, shaping a more resilient, innovative, and sustainable hospitality sector where managers are empowered to truly grow their business through the tools they already have!?

Get in touch for access to our short video which will bring this topic to life for your teams. Engaging and easy to action, it can be incorporated into your Learning Management System or hosted on our digital platform.