The UK economy’s decade-long struggle with low productivity shows little sign of abating. Last year, productivity—measured both by output per worker and per hour worked—was much lower than our major European trading partners and the US. Joe Cripps, managing director of Trail, discusses why it is essential to tackle this issue, and the best way forward.
Solving the productivity puzzle was the backdrop to the Chancellor’s Budget speech last month and is absolutely vital because failure to boost productivity significantly will prevent the economy from growing at speed over the next 10 years.
While there is no quick fix, using technology to cut costs and save time, along with making our working lives more effortless, is a leap in the right direction.
The service sector currently accounts for the greatest share of hours worked at lower productivity levels in the UK. Clearly, digitising existing processes in this sector presents a massive opportunity to address the productivity challenge.
This doesn’t mean that machines are going to take everyone’s jobs (although of course there are roles and tasks where this could feasibly happen) - the hospitality sector fundamentally relies on human interaction. But the use of technology to automate repetitive tasks should empower employees and teams to become more productive.
Improving operational efficiency
Of course, every challenge has to currently be viewed through the lens of Brexit and its potential impact on the sector. The uncertainty on the future supply of labour from the European Union allied to an increasingly tough trading environment that is challenging margins means there is a clear imperative for operators to get more from existing resources. Only the efficient will survive. Many senior industry figures have already warned that rising costs will lead to a change in the business model of foodservice companies in the UK, with a focus on automation and technology to reduce labour costs.
One area ripe for productivity improvements is in the field of health and safety compliance. These days operators would be foolish not to have an arsenal of checklists covering critical H&S requirements but in a competitive marketplace, they are rightly focused on customer experience, not administrative tasks. Record keeping often takes a back seat, even though it directly affects the customer experience through serving good food in a clean, hygienic environment.
Too often, compliance is treated as a distinct workflow, separate to employees’ daily activities. As a result, it can quite easily be an afterthought - a box-ticking exercise - instead of habitual best practice. But compliance is just one part of successful operations that should be woven seamlessly into the day.
Making record keeping quick and easy is a serious challenge. Paper log books are the norm; they are expensive to update, hard to rollout and often impossible to check-up on. Multi-site operators simply can’t be sure all sites in their estate are compliant. And it presents a considerable business risk; environmental health breaches often attract significant scrutiny from the media and public and, amplified through social media, can easily provide disastrous for a brand.
The role of technology
What is clear is that less admin means better service and happier customers. Most software focuses on employee engagement and customer experience ignoring the starting point which should be using simple tools that cut overheads and streamline processes.
The Service-Profit Chain model evolved by researchers at Harvard University in the 1990s established distinct relationships between profitability, customer loyalty, employee satisfaction and productivity. Simply put, value is created by satisfied, loyal, and productive employees. Employee satisfaction, in turn, results primarily from high-quality support and policies that enable staff to deliver results to customers.
Technology will continue to play an increasingly important role in helping businesses improve productivity. At an individual site perspective, compliance will become easier. Automatic monitoring built into equipment and environmental controls will become standard. Manufacturers are already delivering Wi-Fi enabled equipment from fridges to coffee machines. For ops managers, compliance will then focus on exception management; for example, the freezer is about to break, how do I manage the stock?
The best operators will look to implement simple technology that reduces the admin burden on teams, which in turn will free up time to focus on delivering a customer experience that will grow sales and loyalty.
Joe Cripps is Managing Director of Trail, the smart daily checklist helping service businesses run efficient operations