Labor is one of the biggest costs that operators have to manage and contend with. Given this, it is no secret that cutting costs in this department are ubiquitous.
Strategies such as clever schedules, phase outs, breaks, menu pricing and cross-training are all recommended and welcome. For a manager, this ideal can become somewhat of a sport and maybe even a passion.
Ultimately, it resembles a chess match, but the consequences reach far beyond taking a simple “L” in a friendly game. It can lead to deteriorated guest satisfaction by way of overloading a short staff with an influx of business, or employee burnout as a result of demanding too much from them on a regular basis.
One move in this game that is not recommended is the “competitive wages” play. Throughout my career, I used this strategy often and ultimately to my detriment. Many employers in this industry simply will not commit to a wage on their job postings as a means of making sure they don’t overpay for a prospect, and perhaps so they don’t lose out on another because the posted wage is just too low to persuade anyone.
Once I got the prospect in for an interview, the very last thing we discussed, even after a working interview, was “How much do you need to make?” While waiting for the answer, I would sit and hope they fell in my range if not on the low side.
What I see now and didn’t then is how much damage I did not only to my culture, but to the individual themselves. Usually, there were two outcomes:
- The prospect checked all the boxes and presented themselves as a dire need. Once they announced their required wage, I either had to match it, come close or balk.
- If they were of the “must have” ilk, I had to make the decision to hire them at a higher rate than I normally would. This put them in a position of being paid more than some of my most tenured, responsible and valuable employees.
- If they were in dire need of a job, they would be hesitant to tell me what they felt their true worth was and that led to them accepting a number lower than what they needed.
*Both of these situations lead to employee dissatisfaction and turnover.
Not posting a salary tells me two things: The operation is clearly trying to low ball me or that they may not be so organized in their structure and hierarchy.
- Establish a pay scale by valuating the positions in your establishment and stick to it. Then, post it.
- Develop a rating scale to rate prospects so you know where to rank them by experience, skill, position, etc.
- Plan on incremental reviews and increases and standardize them.