Restaurateurs encouraged to outsource

Restaurateurs encouraged to outsource

Restaurateurs are being encouraged to outsource as many tasks as they can in order to combat high labour costs.

Restaurant and Catering Australia (RCA) today released the findings of its 2014 Industry Benchmarking report which has found that 45 percent of business expenses are attributed directly to wages and staff related costs including payroll tax and training.

According to chief executive of RCA, John Hart, the report also revealed that 53.8 percent of businesses have seen their net profit decrease over the past three years and the number of businesses that believe their net profit will decrease over the next 12 months has also increased to 45.8 percent.

In addition, the report states that 12.9 percent of respondents close on both Sundays and Public Holidays and of those respondents, 92.4 percent indicated they close on Sundays and Public Holidays due to the cost of penalty rates.

“We’re saying outsource everything you possibly can,” chief executive John Hart of RCA told AFR. “Whether that’s taking reservations, cleaning the kitchen, cleaning the restaurant, laundry.

“We’re also trying to get them to invest in the cost of value-added food product as opposed to spending money on labour. So if they can buy in pre-prepared things that cost them less in kitchen labour then we’re trying to convince them to do that as well.”

In May this year, RCA won a “historic fight” for changes to the penalty rate regime, which were introduced through the Restaurant Industry Award in 2010. The Fair Work Commission announced a 25 percent cut in penalty rates on Sundays for casual employees which saw a reduction in casual loadings from 175 percent to 150 percent effective as of 1 July 2014.

According to Hart, the cuts alone are not enough to sustain small businesses. Hart said that although outsourcing tasks and automating processes will impact on jobs, it is something that operators will simply have to do to remain profitable.

“The cafe, restaurant and takeaway food sector is the single largest em­ployer across all tourism-related sectors, employing 517,100 Australians,” Hart said. “The results of the survey prove the impact of wage pressures will mean less job opportunities for Australians across the country.

“For a sector dominated by small business, labour costs are ­unsustain­able and are likely to result in restaurant doors closing or staff hours being reduced.”

For the original article from Go Hospitality click here.