Many major cities in the United States have passed new $15.00 minimum wage laws that will drastically affect how restaurant owners are doing business. According to the Restaurant Technology Guys blog, California Restaurants and Retail Stores will be heavily impacted by the new minimum wage increases. This article will help you understand how some major cities will execute the new minimum wage increases and what you as a restaurant owner can do to reduce costs and improve productivity.

3 major cities that have raised the minimum wage

New York City has raised the minimum wage from $9.00 to $11.00 per hour for businesses with 11 or more employees. This wage increase will begin at the end of 2016. The minimum wage will be increased $2.00 an hour each year until 2018.

Seattle’s new minimum wage laws are more complex and will affect businesses on a broader scale.  The current minimum wage in Seattle is $10.50 to $11.00 an hour for businesses with 500 or less employees. The minimum wage increase will reach $15.00 an hour by 2024 for many employers. For many larger businesses the current minimum wage will be rise to $15.00 an hour within 3 years.

San Francisco’s minimum wage will be increased to $13.00 an hour on July 1st 2016. Wages will increase $1.00 an hour each year until July 1st 2018.

Many cities and states in the U.S. have passed similar minimum wage laws that will roll out this year.  The new wage increases will continue each year until the $15 an hour minimum wage increase has been fulfilled.

How Restaurant owners can beat minimum wage hikes

It’s not surprising that technology is being viewed as an ideal “sidekick” to help owners reduce operating costs.

The Restaurant Technology Guys (RTGs) which are industry thought leaders and popular webcasters have said that as a solution, technology has its hand in every dollar that comes in and goes out of the store. Technology improves the performance of your staff, it makes your processes run more efficiently, and it ensures a consistent experience over the entire brand.

But, as the RTGs point out, before a restaurant operator can layer in new technologies, it’s first essential to have the business’s people and processes in place. In simple terms, according to the RTGs, think of the business as a three-tier hierarchy:

  1. Build the restaurant’s foundation on a good hiring strategy; look for the right people; stick to the adage, ‘hire slow fire fast’
  2. Layer in your processes to align with your revenue streams and continually provide training to staff according to these processes
  3. Enable and empower your people and processes with the right technology for automation, expediency and efficiency. “Technology is an accelerant to make your people better and your process more efficient.”
Turning to restaurant technologies to tackle rising labor costs

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Turning to Restaurant Technologies To Tackle Rising Labor Costs

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Technology used to reduce operating costs

Labor Management Software

Software based labor management programs come in all shapes and sizes. These labor management systems reduce costs by gathering historical data and existing budgets for a particular date and time. It’s common for restaurant chains as well as successful restaurateurs to employ labor management systems.

Labor Management Software

Tabletop Tablet Ordering Systems

Tabletop ordering systems can greatly improve your restaurant’s productivity while reducing costs and boosting profitability. With Tablet Ordering Systems you can reduce your labor costs and improve productivity in many ways. Here are a few benefits of using tabletop ordering systems

  • They reduce the need for a large wait staff
  • Kitchen staff receives orders directly from the customers
  • They engage customers with the ability to customize their orders and purchase additional menu items
  • Patrons receive faster service while improving table turnover rate
Tabletop Point of Sale

Mobile Payment Solutions

Mobile payment solutions are an innovative and smart way to reduce costs and better serve your customers. Mobile payment solutions can streamline the payment process and improve the table turnover rate. Your patrons can split bills, calculate tips, and pay their bill right from their smartphone. Another value added feature to mobile payment solutions is that your customers can order items for pickup and delivery straight from their mobile phone.

Mobile Payment Solutions

Ordering from a kiosk

Kiosk POS systems are a great way to reduce labor costs by freeing up your staff and allowing them to tend to customers or kitchen duties rather than spending time at the register taking orders.

Kiosk Point of Sale System

Restaurant Inventory Software

These systems can greatly improve your bottom line by communicating with your Point of Sale System and tracking used ingredients based on sales. This allows you to order the correct amount of supplies and ingredients with less waste and better efficiency.

Restaurant Inventory Software

Conclusion

While the rising costs of labor is forcing some restaurant owners to close their doors, it’s not the end of the world for restaurateurs. Savvy restaurant owners can beat the minimum wage increases by applying new and emerging Point of Sale Technologies, Restaurant Inventory Systems, and Labor Management Systems.

Sources:

National Employment Law Project: 14 CITIES & STATES APPROVED $15 MINIMUM WAGE IN 2015
Restaurant Technology Guys:  The $15 Minimum Wage: Facts and Benefits
NorthStar Restaurant POS: Turning to Restaurant Technologies to Tackle Rising Labor Costs (PDF Download Page)
Time Magazine: Every City in America Getting a $15 Minimum Wage