The cost of human error in hospitality businesses
“Our special beer changes daily, so it may have been human error, on behalf of our bar staff, apologies for this mistake. ” — Sharon, owner of a restaurant
Both wait staff and customers make mistakes in hospitality business. On average, the human error costs around $30 per order and $9,000 every month (based on a 20 table restaurant, 6,000 orders monthly) and a 5% human error rate.
People don’t make mistakes on purpose. We are human. But the truth is that our unconscious mistakes could lead to large unnecessary losses. Let’s take a look at some common human errors today and how they could be minimised even further.
“We ordered Magritte pizza with prawns topping and Chef’s special pizza with extra cheese. They got my order wrong. And we waited a further hour to get the right order.” — Tom, diner
Staff entering the order incorrectly is a very common human error. But this error could cost the business around $80 (interruption in the kitchen and order flow, cost of pizza wasted and new pizza made), which is a significant loss of revenue.
Current solution: Wait staff recite back the customer’s order right after taking the order. But they often don’t have time to check the order once being putting into the POS system, they’ve got other customers to attend to. From our research, this confirmation step takes at least 2 minutes, which costs about $120 (based on 200 orders daily and hourly rate of $18.29).
Better solution: Let’s remove the double entry of the order into the POS system as it is highly prone to human error. If customers directly submit their orders by using their own mobiles, we’ll reduce the human error since we remove two points of error. Now, wait staff can use the extra time (around 10 minutes) to build relationships and hence loyalty with customers.
“I was sent incorrect meat items on an order clearly stated as vegetarian.” — Tina, diner
The kitchen staff works in a fast-paced and stressful environment. When the docket is stained with oil or torn, the staff may miss special requirements or details and spend time cooking the wrong food. This mistake can cost from tens to hundreds of dollars depending on the value of the dish.
Current solution: The kitchen staff asks for a new docket but this introduces a delay to everybody. Wait staff needs to find the right order from the POS system, kitchen staff needs to wait for reprinting and customers are waiting. This can cost a business about $90 to $ 180 (based on 5–10 minutes per issue) per month in addition to a potential bad impression on the customers.
Better solution: Send the order directly to the POS system so it’s already there. Searching for orders digitally can be a lot faster than paper and saves staff time from moving physical orders around. Using an interactive digital screen (eg. mobile, tablet, etc) to display all the orders can help focus on quality and looking more professional.
“After 30 minutes waiting, we found our food was served to another table. This lack of care is consistent with the quality of the food.” — Jone, diner
A wait staff serves about an average of 5 tables at the same time. The number goes up during peak meal hours, increasing chances of mistakes. This often leads to a bad impression and the customer is less likely to return. This is expensive because it’s 6–7 times more expensive to acquire a new customer.
Current solution: To hire more staff to improve customer service or schedule staff more efficiently? Restaurants are continuously trying to find a cost-effective way to manage service quality.
Better solution: Make every staff an “experienced staff” with the assistance of technology. For example, an online menu with the option to order, can reduce the time of getting a menu, taking and placing the order and double entry into the POS. This time saved by the wait staff can be used to provide a more attentive and personalised service to increase chances of customers coming back (perhaps with more friends).
“I noticed that they had charged my card twice (once for the pre-tip amount, and again for the correct amount including the tip). We stopped by in person a few days later to show them the incorrect charge on our bill.” — Wendy, diner
Wait staff handling the payment process again is room for error especially with double entry, eg. type in the amount to be paid into Albert or an EFTPOS machine. If neither the customer or staff catch such error at the time, it’s painful for the customer to get their money back. What’s worse is that if the customer finds the problem first and they jump online to give your restaurant a 1 star rating.
Current solution: As there is so much human work during the payment process, the only solution is to manually check the total bill amount and the POS payment amount after every transaction. This can cost a business at least $1,400 per month (based on 150 EFTPOS transactions out of 200 orders daily and a minute to check each bill).
Better solution: If customers pay their own bills through a self-service system, it’s the customer’s responsibility to check the bill amount and we remove any human error that cost businesses more than the difference in cost charged.
Nobody wants to make mistakes and incur the additional cost and frustration that come along with it. But it’s hard to remove the unnoticed human error unless we remove the opportunities for this error. The right technology can reduce this and allow wait staff to focus on more valuable tasks like building relationships. After all, its cheaper than advertising since you’ve already got customers in your restaurant and building a memorable relationship then and there is powerful.
With the help of a mobile-friendly menu, it can free up some time for your wait staff to better serve customers and put thousands of dollars back into your pocket from minimising human error. This may even help your staff enjoy their job a bit more because happy staff are loyal staff.
Would you like to learn more about hospitality businesses? We work with hundreds of restaurants and provide customer-friendly technology consultation. Get in touch at email@example.com :).