From The Australian, Entrepreneur
THE hospitality business in Australia is huge. It is jam packed full of small entrepreneurial businesses with over 40,000 restaurants, cafes and caterers alone turning over $15 billion.
And they all have one massive problem: finding and retaining the correct staff. And that means it is more important than ever to retain the best.
The industry employs 242,000 people but it is short of another 55,000 staff, with the biggest problem being finding chefs, cooks, waiters and managers, according to Restaurant and Catering Victoria CEO Todd Blake.
Restaurants particularly can only operate at peak capacity based on dining space, kitchen capacity and with the right number of staff.
“The dining space and kitchen capacity stay the same but if you’ve got two chefs and you need four, those two chefs can only produce a given number of meals in any service period,” Blake says. “So the restaurant has to operate at a less than optimum level because they can’t get the arms and legs to do it.”
“The victim, if there is one, is the level and quality of service. The businesses are so desperate to find people to put on the floor to carry plates that they are just putting people on the floor to carry plates.”
One person who knows how to build a stable business is Melbourne restaurateur Con Christopoulos, who runs some of the city’s most successful and coolest venues such as the European, the Supper Club, Siglo, City Wine Store, Gills Diner and Journal Canteen.
He says to find the right staff takes time and it helps to run a business for the right reasons.
“Reputation is everything, isn’t it?” he says. “And good people bring good people.
“Once you have a bit of momentum with good staff they tend to attract good staff. It doesn’t stop people leaving. You just end up holding them longer.”
Blake says one of the important factors for attracting good staff is to offer regular training.
“The correct answer is to tell the business to train people,” Blake says. “But you have this turnover of up to 30 per cent (of people) in any one year.”
Dean Oberin is a former merchant banker who owns Oscar W’s Wharfside in Echuca and employs up to 25 staff in his 150-seat restaurant. He says one of the most important aspects of the business is to develop and nurture staff even if they will eventually leave to work in Melbourne or abroad.
“We’ve spent between $20,000 and $30,000 this year on tutorial-style training down in Melbourne. It’s a great thing for the staff. It’s part of their personal development. They sit in the room with people from other big-name restaurants.”
Each individual also has a personal development plan. “It assesses where they are and where they want to get to and then road-maps out a journey for them,” Oberin says. “It’s a twofold thing. It allows us to have more time with them rather than having them go somewhere else to get what they want.”
He says it is important to promote from within and give staff clear areas of responsibility. However, Oberin also says his business is an awkward size. “We are not a huge restaurant,” he says. “We are that ugly sort of size, too big to be small and not big enough to be huge. It is really important for us to acknowledge that that’s what we are.”
Christopoulos puts a lot of effort and money into in-house training which he sees as essential because he hires people for their personality and fit with the team rather than for expertise at front of house.
He says that one advantage of having multiple venues, where managers tend to have their own stake, is that he can move staff around if they become bored. “You have to keep them fresh.”
And that’s the message from all good restaurant entrepreneurs — that staff respond to being kept fresh and being given new challenges.
But still the financial structure of the industry is a problem. In the US, where staff rely on tips because they are paid near the minimum wage, the average return for restaurants is 15 per cent profit.
“You have this horrible circle going around with the industry having a net profit of 3.8 per cent, so they are not flush with cash to put into training,” Blake says. The problem is that labour costs, which represent $43 out of every $100 spent in restaurants, have increased by 10 per cent a year for the past four years.
The message is that the best staff strategy is to retain the workers you already have and the basic fact remains, as Blake says: “People work for people because they like the place.”