Industry Perspective
The Future of
Restaurant
Management
A View from 2025
To meet customers’ evolving needs and prepare for whatever
is around the corner, operators must bridge the gap between
front- and back-office operations.
Agility was the great differentiator during the acute phase of the COVID-19
pandemic, and restaurants that quickly pivoted to meet new consumer
expectations came out on top. But the ones that remain there are those
that have resisted settling back into the status quo. Instead, they’ve made
the multichannel approach deployed as a pandemic stop-gap into standard
operating procedure—and continue to fuel agility through the embrace of
digital acceleration and automation.
While pandemic restrictions and supply chain upheaval upended
front- of- house operations, a historically tight labor market has turned talent
management into a battle royale. With 7 out of 10 restaurant operators
reporting they didn’t have enough workers to support demand (and don’t
expect a reprieve anytime soon), prioritizing employee engagement and
retention is more essential than ever.
“
“Employees are demanding greater compensation and varied skill sets, and
restaurants have been forced to hone in on what the employee experience is,”
says Justin Guimond, a senior manager at Deloitte. Employees are demanding
greater compensation
Nimbly meeting the ever-evolving needs of both consumers and employees
and varied skill sets, and
can’t happen when back-office functions, such as finance and human
resources, are managed as discrete and largely disparate silos from
restaurants have been forced
front-office operations. to hone in on what the
employee experience is.
“This is where the middle office becomes so critically important for the
hospitality industry,” says Eric Washer, vice president, Industry Product Justin Guimond
Senior Manager,
Strategy at Workday. Unifying data and insights across all functions
Deloitte
gives operators a distinct competitive advantage during times of change,
Washer notes.
Faster, more informed insights have also become table stakes for company
leaders and boards of directors. While those hamstrung by legacy systems
and manual processes struggled to make confident, swift decisions during
the pandemic, those finance teams already primed for speed through digital
enablement and predictive analytics were able to better seize opportunities
and sidestep risks. Even in a post-pandemic landscape, leaders recognize that
there’s no going backwards.
And while the pandemic created unprecedented challenges for restaurants,
the reality is that the hospitality industry will always face disruption. Here are
five imperatives for future-minded operators determined to be ready for 2025
and beyond.
The Future of Restaurant Management | 2
Streamline and strengthen
multichannel management.
From curbside pickup and at-home meal kits to third-party delivery apps and
“ghost kitchens,” restaurant operators multiplied their revenue streams during
the pandemic—each with its own margins, inventory mix, labor needs, and
capacity planning. Even as the pandemic wanes, consumer appetite for myriad
options isn’t going anywhere.
“Multichannel will persist, especially curbside pickup and online ordering—
they’re real game changers,” says Francine Lebel, a managing director at
Deloitte. Indeed, Deloitte research shows that nearly half of diners (46%) say Nearly half of diners (46%)
they don’t expect their takeout and delivery habits to return to pre-COVID say they don’t expect their
levels in the near future. takeout and delivery habits to
return to pre-COVID levels in
But while the multichannel mix will endure, the balance of each may be highly
the near future.
dynamic, as customer preferences, economic forces, and new technologies
evolve. Whether consumers are suddenly flooding the drive-thru, clamoring
to make reservations, or demanding more frictionless ordering options,
restaurants must be ready to pivot.
That agility requires real-time, at-your-fingertips financial and talent data that
allows operators to compare channel revenues against differentiated labor,
“
food, and overhead costs. Innovative brands have been inching toward this
type of multichannel capacity flex even before the pandemic hit, but the past
two years dramatically accelerated that momentum. Agility and being able to make
data-driven decisions is going
Chipotle, for instance, leaned into third-party delivery capabilities back in
to define success.
2018 and launched its highly personalized cross-channel loyalty program
shortly after. Those digital investments meant the quick-serve restaurant Rich Bye
was better poised to pivot during chaotic times. When in-app ordering surged Vice President of Human Capital
Management and Workforce
during the early days of the pandemic, business leaders were able to swiftly
Product Strategy,
allocate underused square footage to create a second dedicated prep line
Workday
that could speed fulfillment without sacrificing the customer experience of
in-store diners.
“The companies with full-stack integration are able to speed their operational
awareness and are more successful in tracking their experiments with delivery,
different methods of operations, and controlling labor costs,” says Rich Bye,
vice president of Human Capital Management and Workforce Product Strategy
at Workday. “Agility and being able to make data-driven decisions is going to
define success.”
Case in point: delivery drivers. Third-party delivery apps proliferated during About 40% of customers
the pandemic, but also took a substantial bite out of operators’ margins. With prefer to order from a
some 40% of customers preferring to order from a restaurant directly, there’s restaurant directly.
pressure on all sides to consider bringing delivery in-house, where operators
can also better control the branding and customer experience.
“Forward-looking restaurateurs will incorporate workforce spend into that
planning, rather than allowing that work to be farmed out to the DoorDashes of
the world,” says Lebel.
The Future of Restaurant Management | 3
But hiring, training, and managing in-house delivery drivers isn’t without
costs or risks—and measuring the ROI of such experiments is easily
hampered if CFOs and CHROs are still relying on data silos. To be able to
identify opportunities, lean into new possibilities, and react swiftly as those
experiments unfold in the future, these leaders must adopt the right digital
solutions now.
Speed successful hiring with smart automation.
While the Great Resignation and a historically tight labor market have affected
almost all industries, perhaps none has been harder hit than hospitality.
Nearly half of restaurant operators—across all industry segments—expect
recruitment and retention to be their biggest challenge of 2022, according to
the National Restaurant Association.
The impact of those open positions threatens nearly every aspect of
operations, from increased overtime costs to lower customer service to partial
restaurant closures.
Operators that embrace cloud-based enterprise-wide solutions will be a
significant step ahead of the competition. Real-time data that supports the
full hire-to-retire lifecycle of a restaurant’s workforce allows operators to more
quickly and easily identify skills and strengths, reallocate resources, monitor
morale, give anytime feedback, and assess retention risk. To more swiftly and
successfully fill openings, operators are able to identify top talent, then hone
in on that talent’s underlying skills and experience to better identify suitable
candidates—even en masse.
“Machine learning and artificial intelligence can power high-volume resume
scraping to surface candidates that will be the best fit for positions,” says Bye.
That’s the case at Shake Shack, which doesn’t scout specifically for restaurant
experience. Instead, the fast-growing brand with more than 7,700 workers aims
to spot candidates with a growth mindset who are looking to develop new
skills and contribute to a greater good.
Restaurants can move candidates from hopeful hire to employee more quickly,
too, if they understand what workers want. For many, scheduling concerns are
front and center: 31% of hourly workers say variable schedules cause financial
hardship, and nearly half (44%) say they want a consistent number of hours
each week, according to Gallup.
“Often, hiring is more focused on the business trying to force fit the worker
into doing what the business wants,” says Bye. “But what’s going to provide
the most long-term success is being able to balance business needs with
worker needs.”
The Future of Restaurant Management | 4
Promoting employee-facing mobile tools to make schedule requests and snag
open shifts may help get potential hires onboard. And such tools can get them
to stick around once on the job: Deloitte research shows employee turnover
is 174% more likely in the absence of real-time work-scheduling capabilities.
Importantly, empowering frontline workers doesn’t come at the expense
of business drivers. Such tools actually help optimize labor resources and
efficiencies. In other words, a win-win.
Employee turnover is 174% more
likely in the absence of real-time
A back-up plan for the back-up plan. work-scheduling capabilities.
Rare is the restaurant that hasn’t been pummeled recently by supply-chain
upheaval and soaring inflation. Producer prices for food rose 13% over 2021,
driving restaurant menu price increases to their highest rate in 40 years, as
of January. At the same time, 96% of restaurants surveyed by the National
Restaurant Association reported experiencing supply delays or shortages in
key ingredients.
Too often, reacting to those challenges involves navigating multiple legacy
data systems and one-off solutions, cobbling together disparate data sources
in search of insights. But operators looking to get off their heels and take a
more proactive stance are flocking to technology that bridges the front and
back office—and everything from inventory management and menu planning
to cash flow analysis and scenario planning—in one intuitive, trusted source.
“
When Boston Pizza ditched its manual system of email and spreadsheets
for Workday Strategic Sourcing, it was able to organize responses from
more than 70 suppliers automatically. The operator is now able to run more Operators are taking a much
events with shorter timelines. With greater speed came greater savings, as more strategic approach so
the procurement and finance teams can more clearly visualize ROI for their they can react quicker and
sourcing efforts. better, with stronger scenario
Creating a cohesive data environment doesn’t have to mean limited planning and multiple
choices, either. Panera uses Workday to power both its finance and human back-up plans.
capital management functions, along with its own proprietary inventory
Eric Washer
software, which integrates seamlessly. Likewise, P.F. Chang’s relies on a Vice President,
third-party inventory system, integrating that tool directly into Workday so Industry Product Strategy,
managers—across all relevant departments—can see accurate, detailed Workday
inventory consumption in weekly reports, and respond more swiftly to
market disruptions.
“Operators are taking a much more strategic approach so they can react
quicker and better, with stronger scenario planning and multiple back-up
plans,” says Washer. “With everything going on in the world, we expect that
organizations will only be looking further out, no longer content to have just
one or two options for a certain supply or a certain region.”
The Future of Restaurant Management | 5
Supercharge employee engagement.
High turnover rates have long plagued the hospitality industry—even before
the pandemic exacerbated employee retention, fast-food restaurants were
seeing anywhere from 100% to upwards of 150% turnover annually. (Turnover
across the hospitality industry around that same time period was topping 70%,
according to the Bureau of Labor Statistics.) Of course, some industry churn is
inevitable. Restaurants employ a high number of teenagers, seasonal workers,
and college students who may not hold jobs year-round. But turnover has been
particularly bleak during the pandemic: in November 2021, a record 1 million
restaurant and hotel workers quit their jobs, citing everything from limited
growth opportunities to scheduling frustrations.
Against that bleak backdrop, future-minded operators actually see an
opportunity to rethink employee engagement and build a workforce centered
less around filling open slots and more around continuous skills development.
While investing time and resources in potentially high-churn employees may
seem counterintuitive, the rewards often outweigh the risks: studies show that
engaged employees are more effective at work and less likely to leave. And a
restaurant employee’s level of engagement heavily influences a customer’s Among diners, 60% say a
attitude toward the brand. A recent Deloitte survey found that 60% of diners positive experience at a
would visit a restaurant more frequently following a positive experience—and restaurant would make them
employees were a primary driver of both positive and negative experiences. want to dine there more often.
KFC was able to better connect the dots between employee engagement and
sales, thanks to Workday Peakon Employee Voice, which captures real-time
employee sentiment, facilitates ongoing feedback, and measures the impact
of employee engagement on core business KPIs. The digital tool surfaced a
clear correlation at KFCs across the United Kingdom between high employee
satisfaction scores and both customer satisfaction and customer sales.
Skills development is a powerful and proven tactic to seed stronger
engagement. Studies show that learning opportunities, professional
development, and career progression are among the top drivers of employee
satisfaction, particularly for younger employees. And a 2021 Deloitte report
points to real-time performance management—including identifying
employees’ development needs in real time, tracking toward goals, and
leveraging data analytics to uncover potential hot spots for further skills
development—as the new direction restaurants must take to outpace
competitors for industry talent.
Of course, strengthening and diversifying workforce skills does more than
simply keep employees content to stick around. As Deloitte’s Guimond points
out, “By teaching new skills, you’re not only upping the employee’s engagement
at the business, but also allowing for increased flexibility across multiple roles.
That allows restaurants to better react to turnover and lack of staffing.”
The Future of Restaurant Management | 6
Elevate the customer experience.
Good food and a clean, comfortable place to sit will always matter. But
modern diners have exponentially raised the bar on what they expect
from restaurants—wanting to be engaged, empowered, delighted,
and rewarded while being fed, a recent Deloitte analysis shows. Most
restaurants aren’t yet stacking up, with fewer than half of diners
reporting they’re very satisfied or better with how restaurants are doing.
Digital tools enable high-performing restaurants to meet most customer
demands at scale. They’re removing the friction of nearly every diner
touchpoint, from requesting a table and ordering to preparation, payment,
and delivery; to soliciting guest feedback and enticing them to return
with personalized promotions and loyalty programs.
With so many digital touchpoints comes so much customer data—a
boon for businesses that know what to do with it, says Andrew Clark, a senior
manager at Deloitte. “We’ll see more operators using that information, at the
right moments, to nudge customers,” Clark says.
But just as a customer’s experience doesn’t track to a single element,
operational insights can’t be unlocked by a single metric. Instead, future-ready
restaurants are turning to powerful data hubs such as Workday Prism
Analytics, which is capable of tracking blended metrics from disparate internal
and external data sources to fuel stronger operational decisions. For example:
fine-tuning a loyalty program promotion by drawing on rich, high-volume data
“
around everything from channel-specific customer satisfaction scores to
marketing spend and labor cost to food waste and employee performance.
Some organizations took
The result is a more personalized, highly effective promotion—one that’s weeks to get a handle on
capable of getting that customer through the door (or delivery app), yes, but
where they were, while those
one that also leaves that customer feeling more seen by and connected to
that were more mature in
the brand.
their digital journey were
able to get results almost
Future-proof financial planning. immediately so they could
No one could have planned for the pandemic, of course. But how quickly
start making changes.
finance teams were able to recognize the bottom-line impacts and weigh in on
possible pivots came down to the financial systems they had in place. Bryan Gates
Digital Finance Manager,
“Some organizations took weeks to get a handle on where they were, while Deloitte
those that were more mature in their digital journey were able to get results
almost immediately so they could start making changes,” says Bryan Gates, a
digital finance manager at Deloitte.
From C-suites to boards of directors, company leadership took note of how
they stacked up with competitors—and quickly recognized that even a
one-day delay can be crippling when it comes to financial planning in times of
flux. Scenario modeling—on everything from long-term footprint planning and
capital management to the impact of mobile ordering on margins—demands
accurate, comprehensive data. And the bar has risen on how quickly leadership
expects financial data to drive insights.
The Future of Restaurant Management | 7
“Those operators who came through the pandemic feeling like they just
scraped by know they can’t rest; they need to fix this,” says Gates. “The
world’s been trained at this point, and there’s no going backwards.”
Serving up the future.
The restaurant industry has experienced a seismic shift: how and where
diners eat, what restaurants look like, what customers expect to experience,
how staff want to work—it’s all been shaped and reshaped by recent
upheaval. But the industry’s appetite for change has also been stoked.
Rather than crave a “return to normal,” operators are leaning into the
traits and tactics that will help them thrive in the future: agility, a sense
of experimentation, and bridging the front and back office into a cohesive,
data- driven powerhouse for strategic insights.
To learn more about how Workday can help your organization,
visit [Link]/hospitality.
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