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Morning Briefing for pub, restaurant and food wervice operators
Fri 25th Oct 2024 - Friday Opinion
Subjects: Why HR leaders are the financial engines and brain surgeons of our businesses, we need more parties, the true cost of stress in hospitality, how not to annoy your employees with Christmas music
Authors: Ceri Gott, Luke Johnson, Alastair Scott, James Picken

Why HR leaders are the financial engines and brain surgeons of our businesses by Ceri Gott

Twelve years ago, I received a call from my brother, Huw Gott, inviting me to work with him and his best friend, Will Beckett. They had taken over a small kebab shop in Spitalfields and opened Hawksmoor, a restaurant with a simple ambition: to serve brilliantly sourced ingredients, cooked perfectly, in a comfortable environment, where guests could relax and enjoy themselves.

Their ambition was to one day make it the best in the world. They wanted to make it the best restaurant to work for because they believed that if we got the people bit right – if people enjoyed working here – then the rest would fall into place. Customers would have an amazing time, tell their friends and come back, and profit would follow. 

I was a government economist at the time, a national expert on labour productivity. My experience felt worlds apart from hospitality, and I wasn’t quite sure how these two worlds would combine. I drew inspiration from “Funky Business”, a book that emphasises bringing together diverse perspectives to generate business innovation and growth.

Bringing my expertise together with Hawksmoor’s simple ambition and culture seems to have been a recipe for success. Hawksmoor has been ranked a top 100 company to work for in 12 consecutive years and was the first restaurant to become a B Corp, while growing internationally to 13 restaurants. A few years ago, it was named the best steak restaurant in the world. 

In 2021, we were asked by Strathclyde Business School to take part in a study funded by the Scottish government. It was looking for companies with a reputation for having great HR practices and great financial performances to extract lessons to help other companies build back better after covid. 

Building on this, I recognise four features at Hawksmoor that help us to attract, develop, retain and motivate people, and also drive productivity. Productivity is how much we get done in a day’s work. If we boost it by “working smarter”, we can get more done in less time, which is good for people and good for business.

Kindness is the key 
“Work hard and be nice to people” is a core value at Hawksmoor. Kindness is crucial; our brains are wired to scan for threats, and if someone is rude or aggressive, part of our brain activity is diverted to sift over this negative experience. So, in short, the productive ability of our brain shrinks. Research shows that even witnessing or experiencing rudeness hinders performance and problem-solving skills.

On the flip side, companies with management teams with higher emotional intelligence scores have been shown to have higher customer satisfaction scores and profitability – they make more money. Acts of kindness also stimulate our immune systems, making us healthier. Emotional intelligence and kindness are not just nice traits, they lead to tangible business results. One small act of kindness can create a ripple effect, positively impacting hundreds of people within an organisation.

Listen to innovate
Hospitality is fundamentally a people business. In a people business, one of the biggest sources of innovation is how people organise themselves and the small changes they make to do their day-to-day jobs faster or better. From our involvement with the Strathclyde study, we learnt that the people who improve their efficiency are the ones who feel they can be the change they want to see – that they have the permission and ability to make small changes to improve their job. 

Those who felt empowered to innovate were typically those who felt heard by their managers and received constructive feedback and support. If we all spent a little more time listening to people, just think how many changes our teams might identify to get more out of their shift.

Learn, learn, learn 
Research indicates that a third of productivity growth in the past two decades is attributable to skills enhancement. At Hawksmoor, we have a wealth of learning available in our training menu, from creating the perfect cocktail to delivering incredible hospitality to our five-stage management development programme. It sets out the training employees get at every step of their journey, from waiter to general manager or commis to head chef. The message is clear from day one: stay, develop and build a great career with us.

Welcome everybody 
At Hawksmoor, we foster a culture where people can feel comfortable being themselves, from expressing their individuality by wearing their own clothes to speaking about mental health, women’s safety, neurodiversity and tackling racism. Creating an inclusive environment is not only the right thing to do, it also enhances productivity. Hiding is mentally exhausting, so it’s not surprising that research has found that it reduces people’s ability to be productive. So, welcoming everyone attracts a bigger pool of people to apply for your jobs, and supporting them to be themselves supports both individual and business growth.

I have been known to say that HR is “not exactly brain surgery”, but I’ve stopped saying that. I’ll leave you with two of the most striking things I learnt from professor Colin Lindsay ,who led the Strathclyde University study we were part of. The first is that there is a lot of evidence that good people practices drive innovation and productivity across the board. The second is evidence suggests that people who work in companies with good people practices have better health outcomes and live longer.

Emotional intelligence, diversity, equity and inclusion and people management can be seen as soft fluffy things, but they drive hard numbers. Great HR and people managers are both the financial engines and the brain surgeons of our companies, and their influence shapes our organisational success, ensuring that we thrive in a competitive landscape.
Ceri Gott is chief growth and culture officer at award-winning steak restaurant business Hawksmoor.  This article first appeared in Propel Premium. A full video of Gott’s presentation at Propel’s Talent & Training Conference, and all the videos from the day, are now available to Premium Club members, who also receive videos of presentations at eight Propel conference events two weeks after they are held. This represents around 100 videos of industry insight over the course of the year. A Premium Club subscription costs an annual sum of £495 plus VAT for operators and £595 plus VAT for suppliers. Companies can now have an unlimited number of people receive access to Premium Club for a year for £995 plus VAT – whether they are an operator or a supplier. Email kai.kirkman@propelinfo.com today to sign up.

We need more parties by Luke Johnson

For the hospitality industry, the last five years have felt like a war of attrition. Two years of lockdowns and covid have been followed by almost three years of inflation and a cost-of-living crisis. It’s enough to make one doubt the future of our wonderful profession. However, I have a solution: more parties. 

Humans are social animals. We love to gather and celebrate. Eating and drinking are almost invariably involved in such events, as are dancing and entertainment. These festivities have been taking place since time began – an essential part of what makes life worth living. Parties are a vital way societies congregate – to embrace friends, to remember important milestones and to forge new friendships. They often represent the happiest moments of our lives – birthdays, anniversaries and marriages. Laughing, feasting and dancing with loved ones – these are the very essence of life.

Unfortunately, there haven’t been enough parties in recent times. People were afraid to go out, they became addicted to sitting at home scrolling on digital screens, losing touch with their companions, and too many have forgotten the joy of the party. In truth, the country feels pretty depressed.

My prescription for this social malaise is clear: more parties of every description that will help cheer us up. I think they are the summit of human pleasure: they combine friendship, romance, music, food, drink and plenty of singing, dancing and jokes. The anticipation of an evening of glittering company, amusing conversation, delectable food and drink – what could be more exciting?

The hospitality trade can revive itself and the country by hosting many more such gatherings. Pubs, restaurants, hotels, amusement venues and nightclubs are purpose built to satisfy this demand. We need to encourage our customers to find any excuse to throw a party. Wakes, weddings, retirements, divorces, a new job, a new home, New Year’s Eve, Guy Fawkes, Christmas, Halloween, product launches, new business launches – there are a thousand justifications for a social gathering to toast something or other. 

I have been throwing parties several times a year for at least 40 years and have no intention of slowing down now. From Brighton Palace Pier to St Thomas’ Hospital via The London Library and the Copacabana Club in Hollywood, I have hosted every sort of bash. From semi-legal raves on Fulham Wharf in the 1980s to refined soirees at The Ivy, they have all been fun. Parties are about being generous, showing off, living in the moment and commemorating the victories. 

In many respects, my entire career stems from holding student parties at Scamps nightclub in Oxford as an undergraduate of 18 and enjoying the buzz of organising guests, music and intoxicating beverages into a compelling cocktail. My subsequent business adventures in bars, restaurants, hotels, bakeries, travel and various other branches of the hospitality sector all started when I became a party host. 

Remote working and online dating are all very well, but they are no substitute for the genuine bonds and serendipity of meeting people in real life. Isolation, fragmentation and loneliness have grown since lockdowns, and research indicates that such disconnection is deeply unhealthy. Parties break down barriers and lift the world’s spirits. And this is where Propel readers come in. We make parties happen – with premises, welcoming staff, delicious meals and drinks, wild entertainment and fabulous music. 

To further promote this mission, I have written a short book with a co-author (Graeme Boyd) called “Throwing Parties – A Guide to Being a Great Host”. I am sure all serious operators in the licensed and catering trades won’t need its advice, but you mind find it amusing in places. It covers issues like finding a location, the art of party conversation, food and drink choices, music, children’s parties, dinner parties and various other topics.

I hope that in a small way, this book encourages members of the public to take the plunge and throw a party. One critical point I make is that too many people feel they need a very specific, occasional reason to hold a party: a birthday, an engagement, a stag do, a graduation and so forth. 

I disagree – why be so conventional? Just throw a party at any time of the year for the sheer exhilaration of being alive, to catch up with old pals, to make new acquaintances and to remind ourselves that we all “walk through the valley of the shadow of death”, as the Lord’s Prayer says. Hence, we need to make the most of our all too brief time on earth and plan another party!
Luke Johnson is a sector investor. His book is published by John Wilkes Publishing and available here. This article first appeared in Propel Premium, which is sent to Premium subscribers every Friday. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription.

The true cost of stress in hospitality by Alastair Scott

One of my team members recently asked for an article I wrote a few years ago on labour and sales growth. Unfortunately, I can’t seem to find it, which means it’s time for a new – and hopefully better – version.

The importance of aligning supply with demand in our industry cannot be overstated. It’s one of the most challenging tasks we face, as it directly affects both customer experience and profitability. At its core, it’s about getting the right number of team members at the right time, which sounds simple but can be difficult to execute consistently. This is where two key principles should always guide our decision-making when planning labour: avoiding overstaffing and managing stress effectively.

First, overstaffing is a bigger threat to service quality than understaffing – something I find myself repeating more and more. As the saying goes: “If you want something done, give it to a busy person.” This saying holds particularly true in the hospitality industry, where staff performance tends to drop when they aren’t busy. 

Overstaffing not only increases costs, but also often leads to worse service. When staff have too little to do, service is slow and lacks energy, and your team will often lose focus. This not only affects guest satisfaction but also wastes resources. If you need a compelling reason to avoid adding extra team members unnecessarily, this is it. Overstaffing doesn’t just cost more – it can degrade service, which is the opposite of what we aim for.

On the flip side, the more obvious breakdown in service and sales happens when you don’t have enough staff. This is where managers and assistant managers are most likely to raise concerns, as it leads to stress for the team – a feeling we’re all familiar with and something we can actually measure. Stress on the floor, whether in the kitchen or front of house, is a real performance detractor, and it’s important that we understand its dynamics. We divide stressful periods into two categories: short stress and sustained stress.
 
Short stress is when understaffing happens for a brief period, maybe an hour, but before and after that window, the team can still deliver the required service. This often happens at peak times – around 1pm for lunch and 7.30pm for dinner. During these short bursts, the team can step up a gear, temporarily delaying tasks like resetting tables or washing glasses.
 
These short, intense periods of stress are manageable and, in many cases, preferable to overstaffing as they don’t usually last long enough to lead to poor service. In fact, some level of short stress can actually enhance team performance, allowing employees to focus and work efficiently without the need for additional staff during the less busy portions of the shift.
 
Sustained stress, on the other hand, is an entirely different thing. When the pressure lasts for two hours or more, delayed tasks start to pile up, and the shift unravels into chaos. The team can’t maintain that higher gear for long, and as a result, service quality suffers. Orders are delayed, bills don’t go out and guests aren’t offered second drinks. Dwell times increase, leading to more complaints. Worst of all, guests may tip less, complain directly, or simply not return.
 
But how do we measure the true cost of stress? Wasted labour is relatively easy to quantify – most businesses can save around 10% of their labour costs by cutting slack. Our experience is that reducing stress can result in about a 6% uplift in sales, depending on how bad things were before. That can translate into a massive 40% profit increase, assuming a few factors I won’t dive into here.
 
So, what’s holding us back? Oddly, many managers deny the sales potential from reducing stress. The two biases I hear most often are “we cope” and “no one complained”. But these are just self-soothing lies. Being honest about the opportunity requires breaking old habits – and sometimes a nudge from someone with a more objective view.
 
Understanding the true cost of sustained stress – chaos, poor guest experiences, missed sales opportunities, and unhappy staff – is crucial for driving sales growth. Balancing labour and service levels might require a slight increase in spending, but the returns – more tips, fewer complaints, repeat customers, higher average spend per cover and happier teams – far outweigh the cost.
Alastair Scott is chief executive of S4labour and owner of Malvern Inns

How not to annoy your employees with Christmas music by James Picken

Ensuring hospitality brands have the perfect background music for their venues is my bread and butter. Every day, the music team at Startle and I are hands on with some of the biggest and best in the sector, helping them soundtrack their customers’ experiences. Although this is important all year round, there seems to be no season where music is so impactful on atmospheres than the festive one. 
 
According to the Iso Principle, music has the power to modulate our emotions, helping us to transition from one emotion to another effortlessly, evoking moving emotional responses and influencing how we respond. So, many operators use Christmas music as a great way to get customers in a spending mood by lifting spirits and encouraging a festive atmosphere.
 
But despite this, it’s crucial to keep the people closest to your business – your employees – happy, motivated and not pulling their hair out at the fifth play of “All I Want For Christmas” in one day. After all, you wouldn’t want to hear the same handful of songs on repeat at any other time of year, so why now?

Here are our four tips for helping you create a very merry atmosphere in your hospitality business this season, without annoying your employees. 

1) Introduce it gradually
Remember that people’s tolerances of Christmas music vary, and jumping from 0%-100% in a matter of days leaves no time for adjustment. We recommend introducing festive songs at a steady rate, beginning with three to five each hour to warm up your team, gradually increasing this in the week leading up to Christmas. This will help to avoid the sudden Christmas music mania that many hospitality workers dread.

2) Establish a balance
Even in the midst of the festive season, it’s crucial to know that Christmas music has its limits. No matter how much you might think “more is more”, bombarding your employees with back-to-back Christmas tracks throughout their shifts can cause serious fatigue and frustration. As a general rule, a 60/40 balance of regular to Christmas songs works well for the start of December, with an increase to 70% festive tracks towards the big day usually being acceptable.

3) Schedule for different dayparts
Just as with your everyday background music, you should take care to consider what songs are suitable for various dayparts and trading patterns. Christmas music can vary hugely in style and the emotions it elicits, so while a slower, sombre number might be a nice start for your quiet or early morning periods, something upbeat is likely to motivate your employees more in busier shifts.

4) Mix it up
When it comes to Christmas songs, the oldies tend to be the goldies. But the temptation to rely on the same ten songs or so to build the festivities will result in overkill. The key here is to spend time prepping your Christmas soundtrack, and don’t be afraid to mix in some lesser-known numbers. While it’s generally advisable to avoid the many cheesy pop blunders of this century, there are some great Christmas covers out there that have less jingling, but more cosy, wintery musical vibes. Having this variety will ensure your team is regularly gifted with something new to listen to.

With every business being different, the ultimate goal should be to achieve something that works with, and enhances, your regular background music schedule. If you can do this, the impact on your employees will be a positive one. Whatever your plan for a Christmas soundtrack may be, following these basic tips should give you a great start.
James Picken is creative director at hospitality background music business Startle

 
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