Our industry is officially, formally and forcibly closed for business. I still have trouble comprehending that this is actually happening.
Over the past week, I have spoken to a great number of leaders from both large and small organisations. Understandably, it was an incredibly difficult task shutting down venues that have been built on tireless effort and significant investment.
While the mechanics are fairly simple, standing down staff, reducing stock levels, managing suppliers and locking doors are all challenging actions both professionally and emotionally. We are all looking to the future with excitement around re-opening businesses for our teams, loyal clients and of course for ourselves.
Over three posts, we will look at the challenges businesses are likely to experience during this time of transition to better enable our preparation for the approaching openings.
People will naturally be at the centre of the solutions.
We need to understand that after an extended closure, an unprecedented number of hospitality operations will all aim to open their doors on the same day.
I encourage you to consider that proposition for a moment. This has never happened before. All venues attempting to transition from hibernation to maximum permitted trading on the same day. The implications are many.
The toll this will place on the business operations is without doubt going to be greater than closing them. Opening a venue is far more complex than closing one and who knows how much notice operators will receive.
State and Federal governments are not known for their clear communication and given their desire to see businesses operating as soon as possible, we will likely experience a rapid return to permitted trading as virus infection trends support it.
Thinking through the day-to-day operational aspects of running a venue, the challenges quickly become clear.
Consider your approach to ordering and receiving of stock for example. We will likely see issues similar to those recently witnessed at supermarkets as suppliers struggled to keep up with unprecedented demand.
Imagine every pub, restaurant, bar and cafe in Australia, placing an opening par level order of meat on the same day. Yes, many venues already place weekly orders, however the volume we’re facing here will likely be high and providers will also have been in hibernation. The entire supply chain will need to re-start which will naturally cause challenges.
Venues will need managers and chefs to generate orders, process them and then receive goods on site. Food items will have to be prepped ready for service. It is a process that is going to require a lot of people, planning and investment.
Having been starved of revenue for so long, operators will look to capture as much market share as possible.
Driving targeted sales and marketing initiatives that deliver cut-through to a cash-poor audience that is being swamped with messaging from competitors is going to require creativity, planning and investment.
Staffing your business is going to be very difficult.
Re-engaging teams and replacing those who are no longer committed to your organisation will likely be the biggest challenge. Yes, there will be a lot of people looking for work when the time comes, however it will be an incredibly competitive recruitment landscape.
To compound this, the talent market will be extremely hyperactive. Those without work will take the first available job then reassess over time. The newly announced JobKeeper subsidy will help with retention, however it will not stave off the impending staffing challenges.
We will see huge staff turnover for the six months following re-opening. Sourcing, processing and training employees is another task requiring people, planning and investment.
I would suggest that operators, particularly those with multiple venues, are going to require a significant number of people working on their business for around a month before they are allowed to trade.
This will place a financial burden on companies that are already experiencing financial pressure, especially when you factor in that some form of limits and enforced social distancing measures will remain on opening, which will affect revenue.
The most effective way to overcome this will be to have the support of team members who know your business. Retaining your key staff is across this period is crucial and this will be the focus of my next post.
Despite most businesses currently being in survival or hibernation mode, these issues require consideration.
Many of us have a lot of time on our hands. Making the best use of this luxury by planning the re-opening phase will only benefit businesses in the long run.
This is the first in a series of three posts from Luke Butler. Keep an eye out for part two on staff retention in the next Australian Hotelier newsletter.
Published in The Shout