Poor measurement puts Australian business at risk

Australian quick service retail (QSR) operators are jeopardising business growth by failing to monitor and measure staff performance levels, according to research by franchise point of sale specialist Shift8.

Findings showed almost a third (32 per cent) of operators had never measured employee productivity or efficiency while well over half (62 per cent) didn’t even set service level KPIs for their team.

Of those who did set targets for staff, 43 per cent said less than half of their employees were meeting or exceeding their goals. One in five said their employee efficiency levels were less than 70 per cent.

Shift8 co-founder and director, Jonathon Britton, said knowing how different areas of a business were performing was critical to identifying the drivers of success.

“A good measurement system will let you examine which areas of your business might not be performing as well as they could be and what is triggering this underperformance,” he said.

“In order to do this, you must first decide what to measure. This can present a challenge as they differ from business to business. Some operators may choose to measure based on customer service whereas others may set financially-focused KPIs only.

"Either way, knowing how to measure is essential. While non-financial targets are important, quantitative measures such as sales per employee, contribution per employee and profit per employee are benchmarks you must be setting if you want to grow your business.”

Just under half of those questioned as part of the research said their POS system allowed them to evaluate staff productivity and efficiency, with one in five admitting to spending four or more hours a week compiling sales and KPI reports.

Ferguson Plarre Bakehouses, which has 64 sites across the Victoria, utilise the system to assist with increasing sales and monitoring staff performance.

“Previous to Shift8 my business was struggling with sales, staff productivity and overall store performance. I only had a nine key register that printed sales made, customer count and average transaction value but that was not sufficient data to help drive new growth strategies and improve my business performance,” said Joe Marino franchisee at Keilor Village.

“After implementing the new system I was able to monitor staff sales and work out which staff needed to be trained in better customer service techniques to increase upsell and ultimately the average transaction value.

“We were also able to change stock requirements throughout the day based on customer purchase habits and adjust rosters to accommodate these customer flows.

After being able to measure staff activity Ferguson Plarre Bakehouses Keilor Park developed an incentive program for all staff to help build sales levels; resulting in friendly competition and quicker staff response with customers.  Mr Britton said the time spent on compiling cumbersome reports would be better spent on other areas of business.

“Complicated back-of-house systems that don’t offer real time or integrated data breakdowns can result in managers spending an unnecessarily long time on report analysis,” he said.

“Adopting a comprehensive point of sale system that combines all of your reporting from staff rostering to hourly sales will allow you to analyse your results from a ‘bigger picture’ perspective instead of by individual business areas.

“This will offer more accurate reporting which, in turn, will help you identify where you are hitting your objectives and where you aren’t. Most importantly, it will let you see more clearly why you aren’t meeting your targets and allow you to address these gaps more efficiently.”