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Managing for Over Time

Everyone who oversees budgets and staff knows that labor expenses are among the most significant expenses on any balance sheet. As important a role as staff play in every business, controlling expenses is a constant issue for management. For many mangers doing this correctly it has been the difference between a paycheck and filing for unemployment. Considering the implications overtime expenses must take center stage.

Here in Arizona the Industrial Commission has first say in employer compliance. Overtime compensation is one of the few areas where a set of legislation has not been written by the Industrial Commission of Arizona. Instead our state based governing body defers to the federally based Fair Labor and Standards Act. This piece of policy speaks directly to overtime pay and what an employer must do to stay on the right side of the law.

As we all know, compensation equivalent to time and a half of exact or average hourly pay is due to an employee that works more than forty hours in a given week. The weekly schedule is determined by the employer and simply must follow a seven day schedule. Work on weekends and holidays does not count as overtime unless work on those days constitutes an excess of forty hours worked. Avoiding this cost increase is a vital skill for every manager.

Avoiding Overtime

A well written schedule is a manager’s best friend. A well written schedule helps to not only avoid overtime but to keep your labor costs in line in general. Overstaffing is just as bad if not worse than paying overtime. Overtime is an identifiable and adjustable issue while overstaffing sometimes becomes commonplace. Once you have identified an overtime issue it is time to look at the scope of your staff’s workload. Take some advice:

  • The truth is there might be more work to be done than you originally thought. If getting the job done consistently requires overtime then you will need to add staff, especially during busy shifts or seasons.
  • Also try watching and taking mental—or written—notes. Is your staff working as quickly as they should be? Are some employees taking unnecessary breaks towards the end of a day or shift which leads to the increase in how long it takes to get the job done?
  • Be clear—yet not overbearing—with your staff about expectations pertinent to the amount of time it takes to get the job done. Provide them with a schedule and order in which job duties are best performed to stay on top of time management if necessary.
  • It might be tempting to massage the numbers. DO NOT do this. Not only is it illegal, it is a sure fire way to kill morale and pit staff against management. The Supreme Court is currently considering hearing a case out of California where hospital workers agreed to have their wages altered to avoid being paid overtime for working in excess of eight hours per day. The tradeoff for the employees was that they worked longer days in exchange for more full days off. The agreement was legally upheld in California but there is no certainty that the Federal decision will be the same. If you are not sure about whether your tactics are legal, read up on employment law or consult an attorney. “I didn’t know” will not get you out of fines and other forms of legal recourse.
  • Bring in temporary employees to fill overtime gaps. It is a great way to ensure that your staff is not overworked and that your expenses stay in line. We would love to discuss the other advantages with you and help you to put together a plan that fits your business needs. Just call (877-522-7797) and we will find a way to make things better.

Sources:

The Legality of Reducing Wage Rate to ‘Avoid” Overtime; The Supreme Court May Decide (Wage and Hour Developments and Insight)

Overtime Pay Requirements of the FLSA (U.S. Department of Labor)

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How Will Rising Food Costs Alter the Restaurant Industry?

The current trend of higher prices at the grocery store isn’t just affecting family budgets–restaurants are starting to feel the pinch, too. An industry that was already struggling, thanks to the recession, restaurants have been trying to slash prices and promote money-saving deals to pull in a regular crowd of customers and stay afloat. These tactics have worked, and most restaurants have actually seen a recent increase of clientele. Now restaurants are facing the difficult decision to not only cease these incentives, but raise their prices to keep up with inflating food costs, possibly undoing any gains they’ve recently achieved.

Affected Foods

The primary foods shooting up in price are whole foods such as fruits, vegetables, meats, and flours. Naturally, these are common ingredients in many restaurant meals, leaving little wiggle room to substitute other ingredients or devise new recipes.

Causes of Price Increases

The cost of transporting foods from distributors to restaurants is soaring. The higher gas prices rise, the more restaurants will need to pay for their food supply. Poor weather has also driven up the prices. With higher demand and less produce to sell, farmers and suppliers must increase costs to stabilize their profits this season.

Creating Customer Loyalty

Developing customer loyalty could save a flailing restaurant when prices are forced upward. Regular customers will typically continue to patronize their favorite restaurants, even in the face of higher prices, so long as they continue to receive the customer service and quality food they are used to. Some restaurants have even posted fliers thanking regular customers for their loyalty, and apologizing for raising their prices.

Exploring Options

Some restaurants will be forced to explore other options, rather than lose clientele with a price increase. This could mean switching suppliers or negotiating a lower price with their current ones. Some restaurants may look into purchasing more foods locally, to decrease transportation costs. Some switches can occur without the customers’ noticing a difference, but restaurants should be aware that the quality of their meals might fluctuate when switching suppliers.

Who’s Getting Hit

Two types of restaurants will likely be hit the hardest: small mom-and-pop stores, and chains that are already straining under significant debt. It is likely that bankruptcies and closed doors could be in the future for many of these struggling restaurants.

When you are faced with rising product cost, you are tasked with finding a way to offset these increases. You may be drawn to slightly reduce your food quality, but remember that this will not go over with regulars–or new customers for that matter. You can schedule as efficiently as possible or even reduce your hiring costs by partnering with a professional employment agency.

Sources:

Rising Food Costs Could Force U.S. Restaurant Overhaul (Fox Business)

Higher Food Costs New Hurdle For Still Struggling Restaurants (Orange County Business Journal)

Restaurants Battle Still Rising Food Costs (QSR)

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Cloud-Based Software Services for Business

Technology presents the business world with new opportunities to add efficiency and increase cost effectiveness on a regular basis. Over the past couple of years, there has been a lot of growth in cloud-based software. For those of us who are not directly involved in IT, this concept might be a bit ambiguous. The best explanation you might have gotten to this point could have come from the recent Microsoft ad campaign directing consumers “To the cloud.”

What is Cloud Software

In its rawest form, cloud-based business software takes programs that handle everything from backing up data to the POS software that you use in a restaurant or retail establishment and allows it to live on the internet. Instead of buying a physical disk or CD ROM, uploading it to your computer and using it solely on the computers that you have uploaded it to, you can simply sign on to the internet. Then you direct yourself to the website that hosts the cloud software, and you can use the business tool without ever needing to hold a CD in your hand. Basically you accomplish the same business functions that you would with less hassle and some additional benefits.

Benefits of Using Cloud Based Software

  • Get exactly what you need: Sometimes you buy a software package and only use half of the features, yet you paid for all of them. With cloud-based applications you only pay for what you use.
  • Expand your access: With physical software, you can only use the tool on the computers you have downloaded it to. With cloud based software you can use it at your office, restaurant, construction site (basically wherever you work) and still have the freedom to check in from your smart phone or home computer when you are away from the workplace.
  • Protect your data: Cloud software is managed by more IT professionals than most businesses can afford—or need—to keep on staff. This means that the information you store with them is regularly backed up (saved) in a secure place and that the software itself has IT gurus watching to make sure that hackers and viruses do not find their way into your business information.
  • Stay current: You might be able to upload patches for your physical software if they are available and you remember. With cloud software, the company that operates it updates your business tools automatically, saving you time and giving you access to the newest technology.

Cloud software is one of the fastest growing sectors of the technology industry because it’s so useful for enterprise. It is just another way to save money and make your business better. If you are looking for ways to do this via staffing, we are always here for you.

Sources:

Why a Web Based Point of Sale? (ShopKeep.com)

Cloud Based Software Sky High (Yahoo News)

The Different Types of Cloud Computing (DataPlex.com)

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How Management Change Affects Staff

Entering a new company as a manager can be an intimidating experience. You’re worried about what your new team will think of you, if they will respect you, and if you’ll be able to shape them into a productive, smooth-running operation. New management can sometimes leave staff members feeling stressed, confused, or bitter. Learn how to nip any chaos or problems in the bud starting on your first day.

Getting to Know Your Company

It’s hard to follow a leader who feels lost in his surroundings. Don’t let your staff feel directionless. Learn about your new company. Educate yourself on how things have always been done. This doesn’t mean you can’t make changes, but it is easier to point employees in a new direction if you know where they are coming from.

Getting to Know Your Staff

A distant manager can intimidate employees or cause misunderstandings. Take time to familiarize yourself with your new team. It will not only improve morale around the office, it will make your delegations much easier. An effective manager knows the strengths and weaknesses of each employee under him. Take note of who gives amazing customer service, who always offers creative problem solving, and who composes the most convincing copy.

Some new managers can take this too far. Don’t try so hard to befriend employees that they lose their respect for you as a boss. Staff should feel comfortable coming to you with their problems or concerns, while still remembering that you give the final word.

Making Changes

Many employees, especially ones who have worked in the same company for years, are going to feel resistant if you start making several changes at once. In most cases, a gradual pace for change is best. Your staff will slowly adjust to the differences in their daily routine, and you can accurately observe what is working and what methods need to be reevaluated.

As you are settling into your new position you will have to get into the swing of things relatively quickly. Your ability to make the right decision will probably be tested your first week, if not your first day. If you are looking for ways to save money and time and show upper management that you can make a real impact, then you should consider reducing labor costs by utilizing temporary labor for some your open positions.

Sources:

The Worst New Manager Mistakes (BNET)

Top 10 New Manager Mistakes (About.com)

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Smoothing Things Over

At some point, every manager will have to deal with a customer complaint or negative review. No system is perfect, and pleasing a population with increasingly individualized tastes tends to create speed bumps. As difficult as it may seem, responding to customer complaints is extremely important. It does not matter whether you run a restaurant or a construction firm; if the people who help you pay the bills are not happy, you run the risk of losing a customer.

Decide Whether to Respond

By and large, you will be responding to most negative reviews. There are some exceptions which make it acceptable not to respond or to delay a response.

  • Your emotions: As a manager, it is your responsibility to remain calm and mop up messy situations. As a human being, you may find this is not always possible. Angry customers will say rude things and possibly even yell. You must be mentally prepared for this to happen. If you are having a considerably bad day or are upset about the complaint itself, it is best to delay responding or have another, calmer, staff member respond for you. Turning a complaint into an argument is a lose-lose situation.
  • Debbie Downer: This is an expression about someone who always finds the negative side of things and focuses on them. Some people complain simply because that is the way they communicate the majority of the time. Responding to these people can lead to disaster, as they are truly just looking to argue and have no real problem with your staff, product, or service. You should still provide customer service to these people, but do not plan on going above and beyond. It is important to note that these customers comprise the minority of the population. Do not be too liberal in defining customers as fitting into this group simply because you do not want to deal with a complaint.

Tips for Responding to Customer Complaints

  • Listen: The number-one thing that you must do is listen to your customers or clients. Let them speak their entire mind without interruption. Do not interject until they have finished talking. This lets them know that you want to get to the bottom of the problem, and it gives you an idea of exactly what the issue is.
  • Stay level headed: Even when customers are yelling, they are not yelling at you. You represent the company that has displeased them. Do not allow yourself to get into the mindset that they are personally attacking you; it takes away your ability to communicate effectively.
  • Repeat the issue: Once you have calmly listened to your customer, you must show that you understand the specific problem. Restate what you see as being the specific issue, and let them know that it is not acceptable (assuming there is a real issue; there normally is).
  • Make it up to them: You must resolve the issue to satisfy your customer. How you go about doing this often determines whether you retain the customer or not. It might be as simple as replacing a meal or defective product. It might be as (financially) painful as reducing a bill/invoice for a set period. Regardless, you must make up for what went wrong and do what it takes to keep the customer.
  • Be equitable: The customer might not always be with you here, but your resolution must fit the issue. A less than optimal experience at a restaurant does not necessarily mean that you are giving up a $100 gift card. Stress to the customer that you want to equitably fix the mistake, but remember to be polite.

Not very many people wake up in the morning and hope to have to diffuse a situation with an angry customer. Unfortunately every manger will have to do it at some point in time. One way to reduce complaints is to employ well trained staff who can deal with your customers successfully. That is one of the major criteria we use when hiring temps who will work directly with the public. If you need to save some time on the hiring process, drop us a line.

Sources:

Small Business Success

Small Business Trends

Business Blogs

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