It goes without saying that Christmas is one of the busiest times of the year for the hospitality and leisure industry, and many businesses are already turning their focus to how to make this year’s festive season more profitable than ever. However, with seasonal scaling up bringing unique challenges, in particular those relating to taking on staff, firms that fail to plan ahead risk significantly damaging potential margins and missing out on the financial opportunities that this time of year can bring.
When anticipating an increase in customers, a common concern for hospitality sector employers will be ensuring that staffing levels are sufficient to handle the pick-up in demand. However, financially speaking, it can be equally harmful for establishments to take on too many workers or employ those without the necessary skills and experience. The challenge of scaling up the winter workforce is likely to be exacerbated in the years to come as access to overseas workers is restricted after Brexit. With the impact of inflation and other factors meaning that customers are tending to leave it later before booking a table for their festive feasts, taking steps to get firm numbers in place as early as possible can help businesses to coordinate staffing levels and rosters.
Regardless of the time of year, hospitality and leisure businesses are highly dependent on flexible labour, but in December it is particularly important that work schedules are kept fluid. To prevent themselves from becoming unstuck by a last-minute surge in bookings, it is important that employers take on the right mix of staff, for example, those with complementary skills as well as with availability at different times of the day and week.
Managing the money
With an increase in the number of staff handling cash over the festive period comes an increased risk of error, or theft. This can be mitigated by putting the correct systems in place to account for and reconcile cash, as well as trying to minimise the cash handling as far as is possible. While ‘unders’ and ‘overs’ will inevitably arise at some point, being able to check who was working on these occasions can help employers to address such issues and prevent them from re-occurring. Having thorough processes in place to check references and train staff can also play a major role in preventing such instances occurring.
Having more staff also increases the probability of mistakes relating to their remuneration. The best way to avoid these is to make sure that staff rota and payment systems are fully integrated. Increased costs associated with staffing bars and restaurants on key holidays, such as Christmas Day, should be taken into account and hours checked carefully before staff pay is calculated.
Dealing with tips
With many hospitality and leisure businesses receiving a large amount of tips it is important that a fair method of allocating the money is agreed and that all staff are aware of it. It is also important that businesses understand and operate the current payroll system for tips. Tips can either go through the company payroll, with the appropriate tax and national insurance applied or they can go through a separate payroll system, not controlled by the company, where there is a potential national insurance saving. However to operate this separate payroll, certain conditions must be adhered to.
Since most tips are now received by the business on credit cards, these can no longer go through the separate payroll system and businesses should therefore review their payroll systems to ensure they are correct.
Sticking to best practice in recruitment
Following best practice in recruitment is also relevant when it comes to driving maximum value from special Christmas menus. A well as selecting a chef and kitchen team with the right knowledge and experience to consistently deliver a quality service, choosing a menu which is not too broad can help to reduce wastage and keep costs down. Similarly, testing a sample menu and taking care to see that it is properly costed ahead of the peak festive period can provide business owners with a helpful insight into how dishes are likely to perform, allowing them to be tweaked and improved in good time.
Ensuring food supply chains are robust by reviewing supplier arrangements in the run up to December and negotiating deals in plenty of time is another way that restauranteurs can reduce risk and drive value.
Ultimately, maximising margins during the festive season should involve lots of pre-planning and learning from past mistakes; looking back at results from previous Christmasses, as well as margins taken throughout the year. This will provide business owners with a useful benchmark, allowing them to create informed and achievable financial objectives for a successful festive season.
For more information on how to prepare your hospitality and leisure staff and business for Christmas, contact Menzies Partner and Head of Hospitality and Leisure sector Dave Gosling. Phone him direct on 01489 566703 or email him at dgosling@menzies.co.uk.