A decision by the Fair Work Commission (FWC) came into effect this month increasing the pay for minimum wage and award staff, putting further strain on the hospitality industry.
From 1 July the rate for minimum wage workers increased by 8.6 per cent, and award workers by 5.75 per cent.
It is seen as particularly impactful for the hospitality industry, coming at a time when costs of goods are rising and the industry is still recovering from the impacts of COVID, but also amounting to wages increasing by 10 per cent in less than a year, after the 2022 award hike of 4.6-5.2 per cent was delayed until October.
The Restaurant & Catering Association (R&CA) suggests the FWC decision will both increase the cost of living for consumers and “significantly dampen business confidence”.
Hospitality specialist Quantaco recently produced an Industry Insights Report finding that while there has been an increase in sales, food profitability has decreased by three per cent and beverage profits by two per cent.
“This increase for team members on an award will be challenging for businesses to absorb without further impacting profitability,” offers Quantaco.
Tackling increasing labour costs
Service industries are particularly susceptible to ‘over-rostering’ in their goal to provide excellent customer service in busy times, often rostering more staff than necessary for slow periods. This is exacerbated by a disconnect between labour and sales.
Best practise is to create an accurate sales forecast for the upcoming week, considering factors that could impact sales, such as weather and sporting or other events.
A key aspect to this is keeping a close eye on actual trading, so as to understand the swings of trading activity and determine appropriate staffing levels.
Quantaco offers that its Salesline system is designed to help manage variable labour costs. Integrated with the POS and time and attendance systems, for a near real-time view of sales and labour, it utilises 24 months of historical sales data to generate a daily forecast.
The full decision of the FWC can be found here.