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Human Resource Management in Indian Restaurant Industry

I have had a good amount of experience of working in regional offices in India, responsible to manage the Human Resource Management function at regional level ‘as smoothly as possible’. There are a lot of things that typically any new HR personnel may have to understand once he joins & even after he settles in the Food & Beverage (F&B) Industry, in Indian perspective. Now, when I say F&B, I am actually referring to the Restaurant Industry, especially the Fast Food ones. Some of my friends, who have been working in this Human Resource Management domain, in specifically this industry, are more proficient on this topic.

Human Resource Management Issues & Challenges: Some Insights

Industry Within Industry

F&B has a wide perspective, and this industry can take in it’s ambit several sub-industry types. For eg: Monginis Cake Company – very popular in Western Maharashtra, if a little less popular elsewhere & which has an above-average production facility – stands in ‘Manufacturing’ but can be categorized into F&B. Various restaurant brands that you know today, say TGI Fridays / Mainland China / Copper Chimney as well as the buffet lunches & dinners in Sun-n-Sand or similar 4-star, 5-star hotels etc (all fine dining) also fall under F&B. So also, the faster-service ones like McDonalds, Pizzahut, KFC and Coffee Chains like Cafe Coffee Day, Costa Coffee, Starbucks etc. This faster-service category is known as QSR or Quick Service Restaurants. QSRs typically offer customer service in quicker time as compared to the Ala-Carte or Buffet type hotels. You can also hear loud / peppy music / faster tunes, more often than the ‘Instrumental’ songs in the Fine Dining Restaurants. Understanding of the exact type of business, early during the honeymoon period of joining, can be very helpful to the HR personnel.

70% of Your Role is into Recruitment

An average of 85% of QSR Industry staff are those whose job is to prepare coffee / pizza / burgers etc. At first, you may think of recruiting people with this skill set is just a mcjob or some job that any HR personnel can do pretty easily. While it may be true, what is challenging is the volume, the number of HR transactions over any period of time. It is an HR Transactional job, a voluminous job. So, you may not be into recruiting highly-skilled & niche segment employees like say Senior Scientists from Chemical / Pharma industry. Rather, you would be more into recruiting of semi-skilled / un-skilled category, who are around 19-20 years olds with only 10th or 12th standard education. If your Company is more structured, then you may go in for some Campus Recruitment in Hotel Management Colleges and recruit them, train them as ‘Management Trainees’ for one year, followed by absorption at Shift Manager or Assistant Restaurant Manager level. Else, you go to NGOs or lower rung colleges in remote areas and recruit people. However, day-in and day-out doing recruitment & pertaining to same category of staff can result into monotonousness and boredom, with no value-addition accruing.

Staff Happy, Customer Happy

Since the business is into Customer Service, HR plays crucial role in ensuring that the staff issues are resolved as fast as possible, especially pertaining to salary / medical benefits / or any other grievances. The faster the issues get solved, the happier the people are and then there is more inclination to serve better, faster and with a great smile on the faces. Pleasant looking staff is always appreciated by the customers, than the grumpy-looking ones.

 

Understand the Psyche of Employees

Come to think of it – When you visit a Coffee Store and order a Cappuccino, who are these guys who prepare your coffee ? Where do they live ? How do they live ? What could be their overall background ? They are 19-20 year old poor kids, who (most probably) have either failed in their 10th or 12th board exams or have voluntarily dropped out of college to support their family or they are kids with no awareness or inclination to better their future & are living by the day.  With that background, doing a job @ Rs. 6,000/- odd salary per month and aiming to take a bike within 6-8 months of service – is a dream come true. It is a different high for them. And understanding this can actually be a great HR Management Case Study, rather than a Challenge.    🙂

 

Dubious Track Record of Employees

Looking at the above scenario, you will almost always end up having employees who don’t have any notable credentials or valid documents. A lot of them use fake experiences on their CVs or have been thrown out due to integrity issues (which nobody ever discloses in interview). Hence excellent relationship with HR community (from competing companies) and reference check of every single hire becomes extremely crucial.

 

Trust Your Staff But Nobody is a Friend of HR

A lot many times and in a lot many companies, you find a kind of ‘Chain’ that gets formed. Chain of employees from same company or better still “chain of employees who worked under the same boss”. Now understand, if the boss is not honest and plays with the cash (in company outlets), the juniors are going to do the same. So, not punching the bill is one area of stealing cash. For Eg: A regular customer, who knows your staff well and who is also impressed with their excellent customer service, may not bother every day to collect the bill. So, dishonest staff may not punch as well and put the money received in their own pockets… Quite possible, isn’t it ? Secondly, your company may participate in a lot of exhibitions, setting up kiosks to have some additional sale in those exhibitions or marriage ceremonies etc. This sale is purely on cash. Another tough challenge HR & the Area Manager have to face together.

 

Need for Constant Refresher Training by HR

There is definitely a need to touch base with all staff based out of your company’s stores across whatever region you are handling. They are so engrossed in their jobs that over 80% of the employees aren’t aware of the Company Goals, Vision Mission Statement and Core Values, Name of the CEO / other top management personnel & other businesses that company operates. Your front-line staff are actually BEST AMBASSADORS of your business. Hence, Human Resource Management professionals should never relax on the fact that the staff has been given one induction training and that’s it. Constant refresher training needs to be given.

 

High & Unplanned Attrition – A Huge Human Resource Management Challenge 

Huge & unplanned attrition is a big big human resource management challenge in restaurant industry in India. Get this straight. There is no emotional bonding or love lost here between staff and Company. One reason here could be that the thinking at ground level is “I am supposed to make coffee, no matter how much I do, I am still going to get minimum wages”. Well, they may not be aware of the terminology called “Minimum Wages” but they refer to this term in terms of the range of salary range, say INR 6,000-6,500 pm. So, if there is another company in QSR segment offering Rs. 500 per month more, he’s gone ! More often than not, without serving any notice period.

 

Operations’ Whims Uncaught

A lot many times, you visit a particular store and find that a couple of ‘good boys’ you hired sometime ago are no longer there. So, you inquire with the Store Manager (Restaurant Manager) and get some hunky-dory response. Take it from me, something must have gone wrong – not as per the expectations of the Area Manager – and he must have fired the boys or better still transferred them to some remote store in a corner of the city that is diagonally opposite to their residence. Invariably, they stop coming and leave the job. Requests start coming in from Operations on need for staff and a soft, good HR Manager will again try his best to hire more people. But it shall never reach you what happened to those boys, why they stopped coming to work, was their ouster justified ??? Certainly, a big Human Resource Management (HR) Challenge. Besides, if the same boys decide to go legal for such exit, another HR challenge – which COULD HAVE BEEN avoided. HR needs to ask right questions at right time and also enlighten the Operations Team on possibility of various unnecessary situations & help them drive the business by being their HR Coach.

 

Pressure of Labour Cost

Each of the stores that are within your assigned region operate on Profit & Loss basis, meaning there is a distinct P&L Statement made for each of the stores. For an Area Manager having multiple stores under him (within a particular region), the P&L Statement is collated. His senior – a Regional Manager – may have multiple cities or States and the consolidated P&L Statement is made for that city or State. This is how performance is defined for Operations team. But within the ambit of Human Resource Management, one aspect which is looked into is the Labour Cost i.e. Salary Cost. It is calculated w.r.t the sales of each of the stores. Around 8-9% Labour Cost in P&L Statement (with right amount of manpower each store) is considered very good. This is a topic which can be elaborated to huge extent but I will only stick to this much here. Remember the percentage though, it can be a challenge to achieve for an HR personnel.

These are some of the broad Challenges & Issues pertaining to Human Resource Management arena in the F&B (QSR) Industry that I could note as of the moment, may not be true for all companies. And in case you can think of any other points, sure you may shoot a message right away. 

 

(Picture Source: http://www.npr.org/tags/129605773/fast-food)

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2 thoughts on “Human Resource Management in Indian Restaurant Industry”

  1. Try comparing this with Retail Industry, especially food and grocery business. You will be shell shocked 🙂

    1. Yes, possibly bitter challenges everywhere, where eatables and consumables are involved. But I guess, the overall challenges and issues will be the same. Which issues are shocking in food & grocery business ? Would be glad to know…

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