Calculate the Cost of Turnover

While the majority of the impact which turnover has on your business is difficult to measure, some negative factors can be quantified. Consider these costs when estimating the monetary loss turnover accounts for.

Employee costs during application phase

  • Advertise to fill position
  • Manager reviews various applications instead of being on the floor
  • Manager conducts interviews instead of being on the floor
  • Drug screens, educational/criminal background checks, and other reference checks
  • Various candidate pre-employment skill, aptitude, and value assessment tests

Employee costs during on-boarding phase

  • Trainee wages
  • Trainer wages
  • External training programs
  • Certifications
  • Mistakes made while learning

Employee costs while leaving

  • Unmet deadlines or goals in employee’s absence
  • Lost productivity due to employee’s absence
  • Potential to lose other employees
  • Lost departmental productivity
  • Cost to retain lost employee’s customers

Replacement phase

  • Advertise to fill position
  • Manager reviews various applications instead of being on the floor
  • Manager conducts interviews instead of being on the floor
  • Drug screens, educational/criminal background checks, and other reference checks
  • Various candidate pre-employment skill, aptitude, and value assessment tests

Also consider the cost of managers dealing with turnover instead of dealing with customers.

The best way to reduce turnover costs is to … reduce turnover. TimeForge can help you reduce your turnover (as well as reduce labor costs, often over 3% within the first week of implementing TimeForge) by providing staff and management a superior means of communication, keeping everyone “in the know” at all times. When it comes to staff turnover, TimeForge reduces it by:

  • Ensuring that employees are never scheduled at times they are unavailable by allowing staff  to fill out their own availability (which can be overridden by management) and automatic enforcement of these availability requests.
  • Making online shift swaps, pickups, time off requests and most non-face-to-face management tasks simple and fast. Managers are kept in the loop as well!
  • Online, text message, and Facebook notifications of work schedules and upcoming shift reminders. TimeForge is available to your employees in formats that they are familiar with and frequently use.
  • And many other benefits to managers and staff … keeping employee turnover down at your business!

TimeForge Labor Management can improve your profits by 3-5%, often paying for itself in the first week alone, offering instant ROI for your business! Sign up for your free trial of our employee scheduling software today, or take a look at our other labor management products.

Still not convinced? Read what other TimeForge users are saying!

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Dinerware

Founded in 2000, Seattle-based Dinerware provides restaurant point of sale software solutions to the hospitality industry. Dinerware can be found in upscale restaurants, cafes, nightclubs, bar and grills, fast casual restaurants, counter service establishments, quick serve restaurants, hotels, casinos, golf courses and wineries.

Dinerware Restaurant POS Software

Dinerware has a really cool startup story. Carl English is a Harvard graduate who used to be the Microsoft Program Manager… this guy really knows his software! He started running his own restaurant, and learned first-hand what many restaurateurs experience every time they use a touchscreen system. He saw how much time it took to complete simple tasks.

Carl used his software expertise to create Dinerware, a point of sale system built around the restaurateur’s needs. The product is highly flexible, and enables the user to accomplish tasks easily and communicate with the entire staff.   Dinerware tracks all sales, provides report breakdowns by tender type, and calculates the server banks. Server reconciliation is fast so servers and cashiers can print daily reports and settle with the house in minutes.   This saves restaurants time, money

Dinerware is an amazing POS system, and TimeForge is proud to partner with such an innovative company to provide you with superior total management of labor and sales. TimeForge and Dinerware compliment one another, and integration of the two is fast and easy!

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Turnover Affects You!

The reach of turnover’s negative impact on businesses is often underestimated by management and is frequently accepted as “part of the industry”. You should never accept any unnecessary employee turnover, especially in service industries. To see how turnover affects your business, think about how often the following effects show themselves at your business.

Lost productivity – Other staff members will have to pick up the slack of a missing employee, which reduces everyone’s overall productivity and your bottom line.

Temporary cost of replacement (i.e. contractor wages) – Some positions can be filled by others picking up the slack, resulting in no immediate incremental expense. However, if this is a frequent occurrence, morale can suffer, leading to more turnover. Other positions will need to be filled with temporary or contract workers, which results in additional cost.

Recruiting/hiring expense – This is the literal cost of filling the position and can include search fees paid to agencies or headhunters, referral fees paid to employees, ads in newspapers, or job board posting fees.

Management time – The time that management has to spend going over resumes, scheduling and conducting interviews, evaluating candidates, and making job offers not only costs the business more wages, but also means that the business is losing productivity because the manager is not on the floor.

Training costs – This includes all the costs associated with ensuring that new staff members have all the skills and tools they need to do the job, like the wages of a trainer and time spent assessing the new hire.

Learning curve – The time it takes the new employee to perform at an optimal performance level. During the training phase, an employee’s productivity and skill set is obviously less than a fully trained employee, and it will take different amounts of time for different new hires to catch up.

Knowledge replacement – Much like the cost of the training phase, your new hire lacks the refined skills that come with months or years of practice. Seasoned employees are extremely valuable to your business, and the cost of losing one has far reaching consequences.

As a rule of thumb, research has shown that calculated turnover costs can run anywhere from 25% to 150% of the position’s salary and benefits, depending on how many of the above costs are applicable to the position.

Reduce your turnover by letting TimeForge handle the stressful parts of your job! TimeForge makes scheduling, payroll, time attendance, and other daily hassles simple and fast!

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Going Green is Good for Profits

Lately, everyone has been going crazy for “going green“. While some business owners are dismissing the rapidly growing trend as a fad, many savvy business owners are learning how to capitalize on the environmentally-conscious movement among younger workers. It is important for businesses to recognize that Generation Y is particularly sensitive to Green efforts, and (as our Marketing to Generation Y blog mentioned) is spending $150 billion dollars annually on expenses such as food, drinks, and entertainment.

Changes to make your business more environmentally friendly will:

  • Improve your employee retention rate of environmentally-conscious Gen Y (and older generations’) staff members
  • Allow you to capitalize on the 70 million individuals looking to spend their money in “Green” establishments. According to a recent study by Forrester Research, nearly 40% of Gen Y-ers are willing to pay more for products or services that are environmentally friendly.

When you are ready to take the next steps to make your business Green, the Green Restaurant Association (GRA) is a national non-profit organization that provides a convenient and cost-effective way for restaurants, manufacturers, distributors, and consumers to become more environmentally responsible. According to case studies by the GRA, businesses that they have assisted have had the following savings:

  • After only one year since their GRA certification, The Draft House reported a 54% water reduction and a trash reduction of 50%.
  • GustOrganics, the first certified Organic restaurant in New York State received free publicity from The Today Show, Telemundo, CNN, The New York Times, Financial Times and more after becoming GRA certified.
  • Boston restaurant Taranta eliminated almost all garbage with recycling and composting program, and enjoyed savings of $1,300 per year by switching from paper towels to an energy-efficient hand dryer.
  • “I realized about a 45% return on my investment in one year and cut approximately $1200 off my annual operating costs. Not only am I pleased with the financial results of my decision, I also know that my association with the GRA has inspired employee morale.” – Jim Solomon, Fireplace Restaurant.

Going Green will help your business save money, reduce employee turnover, generate positive publicity and increase your sales. For more information on going Green or getting your restaurant GRA certified, click here.

TimeForge can help your business take the first step to  becoming  green with our online labor management products.   Our software will help you dramatically reduce the amount of paper required for you to run your business by removing the paperwork overhead needed for common HR needs.

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NRA Show 2010

The TimeForge crew travelled to Chicago to attend the 91st National Restaurant Association trade show, which offered more exhibits and information than we could have possibly hoped to absorb during our four day trip. Every year, Chicago hosts over 75,000 food professionals who gather to share and learn about trends and innovations in the service industries. We went to spread the word about our employee scheduling software, tell people how much time and money it can save them, learn about cool new things that affect restaurants, and well – mostly we went to eat! With revolutionary new marketing practices, award-winning equipment, exciting advances in “Green” technologies, and tables overflowing with culinary delights, the 2010 NRA show continued its annual tradition of overwhelming our taste buds and tickling our gadget-crazed fancies.

This show had an eight and a half percent increase in the number of exhibitors compared to last year, so 2010′s show was even more packed with information than usual. The sharing of information did not fall on deaf ears, as there was also a more than eleven percent increase in the number of attendees – which came from over 120 countries!

Perhaps most importantly, the food was awesome! One of our favorite products that was introduced at this year’s show is Chipstix, which are potato chips on a stick… a simple, yet truly revolutionary concept! We hope the chipstix trend spreads like wildfire! The Chork, a disposable chopstick-fork hybrid, is another of our favorite new products! A fork on one end and chopsticks on the other, the Chork looks like it could actually prevent chopstick-challenged folks from looking silly while eating Asian fare.   Our technology itch was scratched by the YWaiter iPhone application, a mobile app which acts as your waiter at participating restaurants. With YWaiter, customers can place drink orders and check out at their own convenience! If this trend catches on, it could revolutionize the entire service industry!

Perhaps our favorite part at this year’s show was the very spontaneous NRA flash mob dance, which really exemplified the humor and camaraderie found in few other industries. Overall, we were entirely pleased with our trip to Chicago and look forward to next year’s show! We hope to see you at the 2011 NRA show!

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Part Two: Recruiting and Retaining Gen Y Employees

According to the National Retail Federation, turnover within the restaurant, retail and hospitality industry has been approximately 60%-200% over the past five years. Low pay and young staff members are major contributors to the problem, but what can businesses do to improve their turnover and, thereby, their labor costs? Employers should improve their recruiting strategies and their ability to retain employees. TimeForge’s labor management products can assist with strategies to hook the enthusiastic and hard-working Gen Y-ers, in addition to keeping them happy, informed, and fulfilled by their work.

Using college and high school campuses to recruit talent is an excellent way to reach Gen Y-ers in their element. Individuals who are part of Generation Y are especially peer-influenced, so recruiters should be close to their age, and advertisements should appeal to their interests. It’s important to highlight your businesses philanthropy and responsibility during recruiting, because, as we mentioned in Part One, Gen Y-ers are especially concerned about the environment, social justice and various conservation and humanitarian issues. It’s important to contribute toward (and emphasize to prospective employees and the community) the kind of charities that hit home with Generation Y.

An understanding of Generation Y’s appreciation and attachment to technology will help you better recruit and manage members of this demographic. The online and interactive labor management TimeForge provides is easy to use and appealing to Gen-Yers, who have grown up comfortable with computers. In addition to the appeal of online schedule viewing, shift-swapping, training/certification reminders and more, when it comes to applying for jobs, Generation Y prefers to submit their resume/application online. TimeForge’s applicant tracking systems make it easy to compile and store online applications with our applicant tracking systems, which will have you onboarding the most qualified applicants with minimal time and effort.

The amount of retailers accepting online applications has increased exponentially within the past 5-10 years, so if your business isn’t offering a digital application process, it’s likely that you’re losing out on potential job candidates. In a 2007 pilot program, McDonald’s installed computer kiosks to accept employee applications in 40 of its restaurants. The number of applicants at those restaurants jumped by as much as 100 percent. At one McDonald’s in College Station, Texas, the employee turnover rate also was reduced by more than 20 percent, according to an article by Andrew Tilin. By using TimeForge, your business could enjoy similar turnover reduction and employee retention.

Gen Y-ers appreciate the ability to apply quickly, easily, and impersonally while in casual clothes. Offering online application and resume submission also eliminates a great deal of the necessary paperwork that comes with accepting applications and hiring new employees, which not only makes things simpler for management and corporate (where applicable) but it’s a start towards Generation-Y-luring “Green” initiatives. TimeForge can drastically reduce the need for paperwork with our online products that feature document/certification uploading and storage, employee on-boarding, and employee management to assist in a transition to a more “Green” company.

It’s also important to recognize that more Gen Y-ers have goals of opening their own businesses one day, than in previous generations. Learning what they need to know in order to accomplish this is another intangible benefit your business can offer to Generation Y (and other) staff members, and TimeForge’s labor management system is a great way for inexperienced individuals to gain experience and understanding of what managing people is like. In order to find future entrepreneurs, recruit and advertise near hospitality-geared high school classes and university colleges (ex: Texas Tech’s Restaurant, Hotel and Institutional Management college,) and give your Generation Y employees as much room for education and higher placement as possible, in order to allow for growth and continued interest.

TimeForge can help your business better appeal to Generation Y, which can help increase your number of applicants, reduce your turnover, and allow you to better manage your entire labor staff, regardless of generation.

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Generation Y Part One: Marketing

Generation Y has become a challenging market for many businesses in the restaurant, retail and hospitality industries , and most other industries, as well. Generation Y is very different from previous generations, and, to successfully market to them, you must find ways to appeal to their unique needs and wants. TimeForge’s online, digital products are especially easy-to-use for this demographic.

Generation Y consists of those born between 1980 and 2000 and are between the ages of 9 and 29 (BusinessWeek). With over 70 million individuals, they make up 25% of the population , that’s a big piece of the pie your business could be profiting from!

Generation Y is more ethnically diverse, socially-conscious (green/organic marketing is very successful with them — making TimeForge’s paperless, eco-friendly quality appealing to them) and more accepting of alternative lifestyles than past generations. They spend $100 per week on disposable spending (money spent on wants, not needs) which accounts for $150 billion dollars annually! For the older Generation Y individuals (who enjoy the majority of this spending money,) that’s money spent primarily on things like food and drinks — the vast majority of their money is allocated towards entertainment that the restaurant, retail and hospitality industries provide.

In order to successfully market to Generation Y, you must first understand their appreciation and attachment to technology. According to a study by Forrester Research, Gen Y-ers are estimated to spend 20 Billion dollars online per year. The ability to order out, make reservations and check out a new restaurant/retail establishment online are of vital importance to Generation Y. If you business doesn’t offer this kind of online interactive capabilities, you could be losing out on a lot of potential customers. Additionally, is you don’t have an online system for employees in place, you could be losing out on a large number of Generation Y employees, who prefer the ease of features like text message reminders before shifts, online availability editing, shift-swapping, schedule viewing from their PCs or internet-enabled phones, and more. 90% of Generation Y-ers have a personnel computer, 50% of 12-17 year olds have cell phones, and 45% of 18-24 year olds have internet on their mobile devices, and as those numbers increase, their dependability of these devices does as well.

With this technology, Gen Y-ers base their decisions for making purchases on different criteria that the  generations  before them. Social media such as facebook, MySpace and twitter play a huge role in Gen Y-ers’ lives, and how they interact with their friends and family, which is why TimeForge is accessible from mobile phones, facebook and via text message. Not only will having pages on sites like these and integrating with social media and mobile phone capabilities increase your relevance to Generation Y, but Gen Y-ers are notorious for publicizing every aspect of their lives. If you have an easily linked-to facebook page or Web site, it makes it easy for Gen-Yers to tell their friends/followers about your business, and the experience they had. And, as demonstrated by the Forrester study below, clearly Gen Y-ers (as well as other generations!) are responsive to tips from friends.

Gen Y's purchase influencing

As the chart above demonstrates, nearly 60% of Gen Y-ers often tell their friends about products and places that interest them, indicating that word-of-mouth or “buzz” advertising is effective with this age group.  Additionally, nearly 50% of Gen Y-ers as well as Gen X-ers agree that price is more important to them than brand names.

As the Forrester study below demonstrates, Generation Y has a dramatically higher percentage of “Creators,” or  trend  starters, meaning that they enjoy being the first to discover new places, trends, and more. Generation Y’s percentage of “Joiners,” or individuals who hop on the trend band-wagon, is more than double that of other generations. This means that Gen Y-ers are not only eager to discover and patronize new establishments, but they’re excited about being involved in a marketing “buzz.” Where earlier generations were skeptical of marketing ploys, Gen Y-ers enthusiastically embrace and assist them.

Generation Y-ers care about the “cool” factor. Companies like Apple and Target (click the links to see ad examples) are extremely successful in marketing to Generation Y (particularly Gen Y’s “Joiners”) because they focus on marketing their brands as young, hip and fun. They use trendy indie or popular music in their advertisements, tout their green (which a paperless labor management system can help start) or philanthropic initiatives and make their brand relatable to people in the  Genera ion  Y age group.

Online Social Ladder

Online Social Ladder

So, what does all this mean for your business? It means that in order to successfully market to Generation Y, and to create and maintain customers within Generation Y, your business must institute:

1: Social media pages in order to connect with and inform Generation Y. In addition to a facebook page for your business, TimeForge is accessible from facebook, keeping your Gen Yers in-the-know, in their element.

2: Integrate with online technology as much as possible. (Ex: Online ordering and reservations.)

3: Put as much online buzz-worthy marketing out there as possible. If you post it, they will re-post/re-tweet etc.

4: Give your brand a “cool” factor. Your business should seem young, hip and fun. TimeForge manages Gen Yers in a way they can understand and relate to, more than ever before, which will boost staff morale and your employees’ opinions of the business (which this generation is enthusiastic about repeating to others.)

5: Last, but not least: Tout your Green or philanthropic endeavors. If you don’t have any, getting some should be a priority. By simply adding TimeForge to your business’ labor management, our Green product will virtually eliminate the need for paperwork and give your company something Green to add to your list of Gen Y-approved qualities.

To learn more about how TimeForge can help you get Gen Y-ers in the door, click here to learn more or sign up for a free trial today. Also, continue on to Part Two of our examination of Generation Y to learn how to recruit, maintain and satisfy Gen Y employees.

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Easily Manage Labor with Innovative Staffing Reports

Employee dissatisfaction is common among businesses in the retail, restaurant and hospitality industries, and will lead to a high turnover rate. High turnover in a business is extremely costly, as new employees need to be recruited, trained and properly certified , each one costing hundreds or thousands of dollars.

To assist with managing the labor requirements of your business, TimeForge offers extensive reports for many tasks including labor costs, breaks, and scheduled labor, among many others. This week, TimeForge introduced several new reports to make labor management more efficient and decrease turnover in your business.

Shift Ranking:

Are your staff happy with their work environment? From the point of view of your staff members, are there problems with certain shifts that need to be addressed? How would you know which shifts are causing issues with your staff, so that you can address the needs of your staff and your business? You’d use TimeForge!

Using TimeForge, employees have the ability to record whether they were satisfied with the shift they just worked. Our new Shift Ranking reports allow managers and business owners to review a comprehensive account of how many employees were happy with their shift , and how many were unhappy , as well as the ratio of satisfied vs. dissatisfied employees, by either position or shift.

These remarkable new reports, an industry first, provide employers the ability to pinpoint problematic shifts and staff positions in order to decrease turnover and maximize profits for the business. Another report displays shift satisfaction among multiple locations to allow multi-unit operators to remotely monitor their business.

Shift Swapping:

Did you start the week with the perfect schedule, but by the end of the week you are paying unexpected overtime and have unhappy staff? One possibility is that staff are making too many shift swaps, changing around the staffing schedule in an unpredictable manner. Use TimeForge to identify heavy shift swapping and make profitable business decisions!

Our latest shift swap reports allow employers to view the shifts that employees are giving up and picking up, during any period of time, as well as the ratios of shifts given up vs. picked up. These reports provide employers the unmatched capability to gain understanding and control over employees’ shift-swapping habits to successfully remedy employee scheduling problems and overtime abuse.

Managing a workforce requires some give-and-take between management and staff members to ensure that the business runs successfully. Use TimeForge to gain insight into the day-to-day labor management at your business. Just look at what TimeForge customers have had to say about our revolutionary product.

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National Restaurant Association Show, 2010

On May 22-25, TimeForge will be exhibiting at the 2010 National Restaurant Association restaurant, Hotel and Motel Show at McCormick Place in Chicago, Illinois, where we will be showing our latest generation of labor management software for retail, restaurants and hospitality businesses.

The latest version of our TimeForge labor management product encompasses the entirety of labor management, including staff scheduling, attendance tracking, payroll exports, and many aspects of human resources. If you’re going to be at the show, please stop by and pay us a visit to find out how easy it is to save your business time and money!

TimeForge will be occupying booth 5256 at the 2010 National Restaurant Association show, in between FishBowl, Inc. and Eco-Oil Saver.

NRA 2010 is the largest food service and hospitality event in the Western hemisphere. Last year, more that 2,000 exhibitors from 108 countries participated in this global marketplace for the restaurant and hospitality industry.

Highlights of the event include 60+ education sessions, culinary and designer exhibitions and many opportunities for networking. Restaurant owners, operators, chefs, managers, buyers, servers, bartenders, architects, designers, decorators, caterers, and special event professionals will be there exchanging information and ideas.

Use a labor management system to make your life easy and improve profitability at your business! TimeForge can quickly and easily manage staff schedules, employee time off, and time and attendance tracking timecards, employee attendance, and export payroll for accurate processing.   Sign up for a trial today to use TimeForge.

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Labor Management Software Update Simplifies Employee Scheduling

One of the features that makes TimeForge easier to use and more efficient than other labor management platforms is our newly released, visually-demonstrated weekly schedules. The new weekly schedule charts allow business owners and managers in the retail, restaurant and hospitality industries to save time and capital when scheduling staff, keeping businesses ahead of their competition.

While building an employee schedule, a comprehensive daily graph is visible to demonstrate an interactive version of the day’s schedule. While managers are building their staff schedule they can view a weekly staffing chart to see a visual representation of employees’ schedules, by position and times, in an organized, color-coded chart to make scheduling staff members easier than ever.

Easily Schedule Staff by Looking at the Weekly Schedule

Easily Schedule Staff by Looking at the Weekly Schedule

TimeForge founder Anthony Presley sought to solve some of the problems business owners often experience with employee scheduling:

“TimeForge has had daily staffing graphs and visualization for years, allowing managers and owners to quickly and easily visualize their staffing load throughout the day. Our new weekly graph extends this one step further, providing one click schedule validation and visualization. Managers can spot holes in the schedule where their business may be under or over-staffed.”

Take a look at our press release about the latest TimeForge features.

Sign up for a free trial of our labor management tool today!

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