Scheduling for ProfitsJuly 6, 2010 By: Tim Kirkland Night Club and Bar Magazine
Ask the next nightclub or bar manager you see what his or her primary responsibility is at the venue, and I bet most will say dealing with cost control (and many will lead with pour cost). The more enlightened will say something about driving sales or marketing. But the one who will make your business thrive, the all-knowing manager, is the one who answers “people.”
The “people” manager knows that if he or she is excellent at hiring, training and scheduling people, he or she will ultimately succeed at both controlling costs and driving sales. Consider that labor and turnover are by far the highest controllable cost in any nightclub or bar. Consider also that marketing does not drive sales — it drives traffic. With these two things in mind you’ll realize it‘s the people in an operation who sell things and make you the most money. Master the staffing portion of your business, and you have mastered both the top and bottom lines.
It is precisely this dual importance that makes scheduling so crucial. Schedule too heavy and you lose money faster than dropping bottles of Dom Perignon. Schedule too light and you miss out on sales and ultimately frustrate your guests. So how can you best schedule staff to control labor costs and still take full sales advantage of those hard-won guests? A few ideas…
1. Adjust your payroll cycle. Many businesses run payroll cycles and scheduling calendars to reflect the typical business week — that is, Monday through Sunday. If your nightclub or bar is using this standard cycle, I urge you to reconsider. It is designed to serve bankers, not barmen. Starting your payroll week on Monday gives you a full labor budget at the beginning of the week, when most bars are slow; and the least amount of available hours at the end of the week, when most bars are busy. This type of scheduling forces managers to make tough decisions during their busiest nights; namely to make service- and sales-damaging staff cuts or even go into budget-damaging overtime. Instead, begin your payroll cycle and schedule on Thursday and end on Wednesday. This will give you the benefit of a full labor budget going into the busy weekend and allow you to safely make staff cuts on slower days such as Monday, Tuesday and Wednesday in order to meet (or even beat) your labor budget.
2. Put aces in their places. The scheduling of bartenders and cocktail servers has long been considered a function of shift rotation or seniority in an effort to achieve “fairness.” What’s better for your business, your guests and, ultimately, even your servers and bartenders is to institute performance-based scheduling, in which the servers/bartenders with the highest demonstrated sales ability get the busiest shifts and stations. I recommend you break each team member’s nightly sales down to sales per hour per cover (total sales divided by number of hours worked divided by number of guests served) in order to understand each person’s sales ability. Armed with that knowledge, make sure the employees who have the strongest ability and dedication to selling get first whack at the shifts where those skills will best benefit your business. Why would you give a busy shift or station to an employee who will waste it or won’t know what to do with it in the first place? When low-performers complain that this system is not “fair,” remind them that nothing is fairer than the best performers getting the best schedules. They are confusing fair with equal.
3. Shifts should be dictated by sales. Rather than running traditional full shifts, consider half, split and staggered shifts that reflect your sales cycle. Take a reading of sales every hour, every day of the week, and record. After a couple of weeks, you will have a fairly accurate glimpse at when you need more or fewer people on the sales floor. Using this information, schedule “just in time” help by tying the number of people on the floor or behind the bar directly to sales volume (one person for every $1,000 in sales maximum is a good rule of thumb). If you have nights that are unpredictable, use the old standby, the “on-call” shift, but don’t abuse it. Remember, in these days of cell phone and texting technology, the on-call person no longer has to stay home by the phone all night — they must only stay local and sober.
In the hospitality business, people are your most valuable assets. Manage them wisely, and the rest of the lines on your P&L become exponentially easier. NCB