Skimping on staff is leaving money on the table.

04 October 2023

Skimping on staff is leaving money on the table.

A hot topic of discussion with my clients is wage cost. As we all know, over the past few years, massive pressure has been put on our businesses to get our wage costs under control, let alone all the other rising costs.

With rising wages and a downturn in the economy, it's a perfect storm for our bottom lines to be eroded away, leaving less on the bottom line. The obvious solution is to cut wages, which is 100% correct. However, you have to find the balance of cutting costs that don't affect your service.

A team that is rushed off their feet can result in a poor or disengaged customer experience, additional loss of sales, purely because they cant spend that extra 30 seconds with the guest to upsell, get second / third drink sales.

You need to reevaluate your procedures to make sure that you are getting the best out of your team, both on a customer service level and a sales level. Most businesses have a short stink of a busy period, and doing a fundamental cost analysis on what an additional team member would do for your sales over that time is essential.

Here is an easy example. Bar X is busy between 6-9pm; their wage cost has been too high, so they have cut back, which is the correct thing to do. However, the team is just too busy to get around the tables. Three staff are running the floor over this period; if you employed one extra person over these 3 hours for $90 total (ballpark), the team only needs to sell an additional $100 each over 3 hours to make it worthwhile. That is not much to ask for over that period, and it should be more than that, but that is the baseline to make that additional team member worthwhile.

Skimping on your wage cost can also have knock-on effects on your team and business. The team can become disengaged for being too busy and unable to offer a great customer experience, the business gets a poor reputation due to lack of good service, you will struggle to attract good people for your business, and have higher team turnover. 

However, the benefits of doing it will increase your bottom line and create a more engaged team as they can do their jobs properly and offer excellent customer experiences, building a better reputation for your business. 

Think about your business. Are you skimping too much on your team, resulting in sales that are being left behind, ultimately less off your bottom line?




Back to Articles