The present economic slowdown is a small pothole in India’s terrific foodservice growth. Because no owner can cook, clean and serve at once, success will ride on how good your staff is, writes Ravi Wazir
How do we attract and retain talent these days and should we be doing that in the first place? An interesting subject on which I share these thoughts through the approach and outcome of two competing restaurants; A and B.
First let us look at restaurant A’s approach. The CFO took stock of the situation and advised the HR head that restaurants across the country were cutting manpower related expenses by an average of 20%.
The CEO’s advice was to be fair to all employees by ensuring that each department cut costs equally to that extent. Further, in keeping with market trends, expenses such as training must entirely be put on hold. He believed that in a market where many people were chasing few available jobs, there was absolutely no need to do something special to retain talent. “They are not going anywhere,” he laughed. Also, he believed that the idea of hiring new people at a time when business survival was the main concern, was ludicrous, and his was the final word on the matter. The HR head began the dreaded task of issuing pink slips accordingly.
Then there was restaurant B. The CEO gathered his core team to discuss the matter, welcoming their suggestions before deciding on a holistic course of action. He asked his CFO to access their financial position and to recommend the extent to which their restaurant would need to cut costs in each area of the business and specifically in HR. It was concluded that amongst other costs, a reduction in HR expenses by 12% would help ease the pressure.
After some introspection, the HR head felt that while a few employees may have to be laid off, he would first ask some to convert to a consultant status. This would mean retaining their take home salary amount while reducing their cost to company. A few, he felt, would be suitable to approach with an option to stay on but with a pay-cut. Further, while he axed luxury perks at all levels, he opted to delve deeper on the matter of training.
The top management of the organisation worked collaboratively with their teams and shared on-going developments down the ladder. Several small spot incentives were awarded to employees who came up with cost saving initiatives that did not compromise the long-term brand equity of the restaurant. The long-term perspective being the basis of decision making, it was also agreed that their existing talent pool be augmented by skill sets in which the team needed improvement. Purchase and marketing were the areas identified and it was decided that profiles of potential candidates would thus be explored.
In the meantime restaurant A, having issued a number of pink slips in accordance with the market, found the staff morale of its remaining team members was dropping. Productivity began deteriorating and their customers bore the brunt of it. The little business that they had, had begun to shift to their competitor, restaurant B, whose genuinely hospitable staff certainly made guests feel welcome.
Additionally, two of restaurant A’s laid-off superstars, the purchase supervisor and marketing manager, went to work for restaurant B. They were encouraged by the work ethos and team spirit there.
On the matter of the training budget for that financial year, restaurant B’s HR head concluded that it would have to be axed by 70%. The available funds were spent on very few but relevant training programmes conducted by senior industry associates at a nominal price and one even was honorary.
Not only had their stance on hiring the two new employees paid immediate dividends but also their work culture clearly supported the likelihood of their long-term retention.
By the time the recession began to lift, restaurant A attracted only opportunistic employees whose intentions had a proportionate impact on its patronage. On the other hand, restaurant B attracted talent with far more positive intentions and that too had a proportionate impact on its patronage.
While this example is of course purely hypothetical, the approaches and outcomes mentioned here are very real and in fact closely resemble those of many organisations these days.
The circumstance of each business is always unique and must be addressed accordingly. What remains constant is the fact that their choices today will have a certain impact on their outcomes both tomorrow and many days thereafter.
Ravi Wazir is a hospitality business consultant and author. He can be contacted through his website http://ravi.freeshell.org
Save staff, save business
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The present economic slowdown is a small pothole in India’s terrific foodservice growth. Because no owner can cook, clean and serve at once, success will ride on how good your staff is, writes Ravi Wazir
How do we attract and retain talent these days and should we be doing that in the first place? An interesting subject on which I share these thoughts through the approach and outcome of two competing restaurants; A and B.
First let us look at restaurant A’s approach. The CFO took stock of the situation and advised the HR head that restaurants across the country were cutting manpower related expenses by an average of 20%.
The CEO’s advice was to be fair to all employees by ensuring that each department cut costs equally to that extent. Further, in keeping with market trends, expenses such as training must entirely be put on hold. He believed that in a market where many people were chasing few available jobs, there was absolutely no need to do something special to retain talent. “They are not going anywhere,” he laughed. Also, he believed that the idea of hiring new people at a time when business survival was the main concern, was ludicrous, and his was the final word on the matter. The HR head began the dreaded task of issuing pink slips accordingly.
Then there was restaurant B. The CEO gathered his core team to discuss the matter, welcoming their suggestions before deciding on a holistic course of action. He asked his CFO to access their financial position and to recommend the extent to which their restaurant would need to cut costs in each area of the business and specifically in HR. It was concluded that amongst other costs, a reduction in HR expenses by 12% would help ease the pressure.
After some introspection, the HR head felt that while a few employees may have to be laid off, he would first ask some to convert to a consultant status. This would mean retaining their take home salary amount while reducing their cost to company. A few, he felt, would be suitable to approach with an option to stay on but with a pay-cut. Further, while he axed luxury perks at all levels, he opted to delve deeper on the matter of training.
The top management of the organisation worked collaboratively with their teams and shared on-going developments down the ladder. Several small spot incentives were awarded to employees who came up with cost saving initiatives that did not compromise the long-term brand equity of the restaurant. The long-term perspective being the basis of decision making, it was also agreed that their existing talent pool be augmented by skill sets in which the team needed improvement. Purchase and marketing were the areas identified and it was decided that profiles of potential candidates would thus be explored.
In the meantime restaurant A, having issued a number of pink slips in accordance with the market, found the staff morale of its remaining team members was dropping. Productivity began deteriorating and their customers bore the brunt of it. The little business that they had, had begun to shift to their competitor, restaurant B, whose genuinely hospitable staff certainly made guests feel welcome.
Additionally, two of restaurant A’s laid-off superstars, the purchase supervisor and marketing manager, went to work for restaurant B. They were encouraged by the work ethos and team spirit there.
On the matter of the training budget for that financial year, restaurant B’s HR head concluded that it would have to be axed by 70%. The available funds were spent on very few but relevant training programmes conducted by senior industry associates at a nominal price and one even was honorary.
Not only had their stance on hiring the two new employees paid immediate dividends but also their work culture clearly supported the likelihood of their long-term retention.
By the time the recession began to lift, restaurant A attracted only opportunistic employees whose intentions had a proportionate impact on its patronage. On the other hand, restaurant B attracted talent with far more positive intentions and that too had a proportionate impact on its patronage.
While this example is of course purely hypothetical, the approaches and outcomes mentioned here are very real and in fact closely resemble those of many organisations these days.
The circumstance of each business is always unique and must be addressed accordingly. What remains constant is the fact that their choices today will have a certain impact on their outcomes both tomorrow and many days thereafter.
Ravi Wazir is a hospitality business consultant and author. He can be contacted through his website http://ravi.freeshell.org
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