Deciding whether to go in-house or contracting another party for your food service program is a decision with a lot of variables. You need to consider your culture, how long you plan on running your dining services, recruiting and keeping personnel, profitability, how specialized your market is, food safety, acquisitions, records, menu planning, training in culinary and hospitality services and being able to provide a program that remains fresh, enticing and current. You also need to consider social media and new technologies that change how guests deal with the staff in ordering, styling and paying for the food.
Here are the most important considerations to bear in mind when deciding to contract the position.
Recruitment and Retention
Food service is built upon a foundation of supervisory personnel who know how to manage operations, prepare food and grasp basic financial statements. It also requires good communication, decision-making and leadership skills. Once you have figured out who might cut it, you need to find the right person who fits in with your business’ culture and whose salary range suits a manager. On the other hand, contract workers are always hiring and bringing in managers and culinary educated people with aspirations for change or growth.
When an organization self-operates its food service, managers can be hard to find from the start because its recruiting arm doesn’t look out for suitable managers until the previous manager gives notice, becomes terminated or goes into retirement. If you have succession plans to cover the position, then your organization will do well so long as you remember to fill the promoted individual’s former job.
As for retention, a solo endeavor will have trouble keeping good talent because of the very tangible ceiling within dining. These people usually want more challenges and responsibility in the hospitality sector, giving the advantage to contractors.
Financial
Outsourcing provides several options. A “cost-plus management fee” guarantees the budget, profit/loss and cost on a daily basis. Outsourcing shifts a lot of those responsibilities onto the contractor, whom likely knows how to get better deals within the industry and suppliers than an in-house operation. Contractors’ resources translate into 5-25% savings on daily operations. Outsourcing also entails less of a price swing from suppliers because contractors know how to negotiate every year for a locked-in price. These procurement arrangements mean that costs are controlled better than with a self-operated outfit.
Chances are high that the food service manager of a solo operation is pursuing weekly negotiations with various outfits, over the span of several hours each week, instead of focusing on operations and staff. This is especially problematic when you have fewer than five management employees.
Notably, a lot of state-run operations handled this situation by focusing on goods with long shelf lives; they just make a bid every 3-6 months and store the acquisitions on the premises. Note that state entities do not use the usual cash flow model-they work with an annual budget. This means that other private industries have a hard time managing cash flow when writing out a large check to suppliers every quarter.
Financials require skill at risk-assessment, knowing when to increase worker’s compensation and liability coverage because of how unique food service is when compared to your core industry. Remember food service employees deal with heavy objects, sharp objects, hot ovens and other equipment that entails safety training and oversight. You also need to be mindful of the potential for food-borne pathogens or injuries to customers. Offloading that risk to a contractor can help keep insurance costs sane.
System/Support Structure
Self-run food services have to constantly find and use different operating systems unique to the department. These OSs include POS, menus, nutrition info, marketing and digital communications that are all specific to food and catering.
Consider how an on-site manager of a self-run situation is going to gain the culinary, financial, marketing and operations support. A contracted manager knows who to bring on with experience each of those subjects as they concern this industry. There may come a time when you want to run a large catering event or please VIPs or high-dollar donors with an event involving on-sight crews.
This scenario can be a nightmare for self-operation but contractors can bring on the necessary talent and experts from other locations in their circle of influence in to cover a dining crowd of any size. This means they can both figure out the necessary number of servers, cooks, expediters and pieces of equipment but also successfully deploy that many.
