$22 California Minimum Wage Proposal and What it Means for Restaurants

California governor Gavin Newsom signed a bill establishing a council to raise the minimum wage for California fast food workers to more than $20 an hour. What could this mean for restaurants? In a nutshell, margins will get squeezed down even more. With rising food costs and labor costs, restaurants are going to have to look for a way to bring down labor costs as soon as possible.

Call Center Outsourcing: The Traditional Way

One of two primary ways they can do that is by outsourcing phone calls from the restaurant, which could potentially free up labor to be more efficient. They wouldn’t need to hire as many people inside of the restaurant, which presents a big opportunity especially if they’re in a high phone order volume business like Cracker Barrel, Bob Evans, Dominoes, Pizza Hut, or other big chains where pickup/delivery orders are at least 30% of their order volume.

Voice AI: A New Era of Technology

The other big option is to use voice AI for phone orders; however, the biggest misconception regarding AI is that it's going to improve guest experience.

In reality, most callers would prefer to speak to a friendly human over a machine, which is partly why they're calling in in the first place. So, voice AI systems can actually negatively impact guest experience, especially without having human support as a failsafe.

We’ve recently spoken with the CEO and founder of a billion-dollar market cap voice AI company, and he mentioned that they’re actually staying away from the restaurant industry. This is because it’s too much pressure as a revenue-generating function. Guests typically don’t want to deal with voice AI and often just hang up. In fact, during a pilot they did, restaurant chains assumed they were going to save money because it was voice AI, but what actually happened was a large decrease in sales due to guests wanting to speak to an actual human. Even though the cost for voice AI may be appealing compared to a human, the restaurants realized that a call center provides a bigger ROI and a better guest experience overall. This is not to say that voice AI is never effective or doesn't work, but there are some clear disadvantages from a customer experience standpoint.

The future of voice AI technology is bright; however, it is simply not advanced enough yet to meet the wants and needs of the modern customer. For now, call centers are still a restaurant's best bet.

Order Solutions Has it Down to a Science

Order Solutions is solving this labor problem by putting together teams of top-notch agents in the Philippines that speak amazing English. Then, we build custom training programs that are extremely robust to make them experts on different brands. Our management team trains and coaches agents in the Philippines with a focus on driving performance. Because the dollar is so strong in the Philippines, this provides an opportunity for even more labor savings for restaurants.

It typically takes up to 30 days to onboard with Order Solutions and we could be handling phone orders for as many as 100 stores in 30 days (or up to 200 stores within 60 days). Order Solutions can save restaurants 50% - 85% on labor costs compared to hiring internally, all while helping to drive profits and improve guest experience.

Read our article about our onboarding process for more information. To partner with us, visit our website to fill out our demo form!