Case studies

How data analytics helps manage labour productivity for the catering and food services sector

Pinpointing the problem

The business challenge

Labour is the single biggest cost for the catering sector. Given wage inflation and increasing margin pressures, as well as problems recruiting appropriately skilled workers, catering businesses are increasingly seeking better ways to manage people and costs.

Due to long-term under-investment, companies often don’t have effective labour management systems that can match demand with supply. In many cases, labour schedules have remained static for years, with the same number of staff members working at the same time every day, irrespective of how many are needed. There is also an imbalance of experience in workers doing the same job in different locations, meaning rates of pay are not aligned.

Accounting for a large proportion of the cost base, sub-optimal labour performance often correlates with low or negative operating margins. Labour performance across similar sites can vary notably and one reason for this is that managers often lack sufficient, trusted information to help them make informed decisions to improve labour performance at their site.

How can a catering company start thinking about options to reduce costs but still remain competitive in the market for clients and talent?

The solution

We have developed a labour productivity solution to help catering companies better optimise their workforce management approaches. The aim is an improved labour-to-revenue ratio for each site, achieved through clearly prescribed and practical actions. The solution includes analysing the manager and supervisor headcounts, assessing the mix and capabilities of part-time, full-time and salaried employees, and aligning staffing schedules with demand. The algorithms in the solution automate the identification of saving opportunities. They also provide rich, quick insights into human resources, transactions and financial data.

The benefits

This data-led approach to labour productivity has provided labour savings of five to six per cent across the £1 billion of labour expenditure that has so far been examined; this has generated over £50 million of savings in labour costs. The analytics tool includes an easy-to-use online portal to input scheduling and labour data quickly and accurately.

This results in insights regarding scheduling, blends of skills and roles, management ratios and pay levels. Catering companies that use the tool can quickly improve efficiency by implementing more effective labour models.

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