Lean times for Chinese restaurants

Chinese restaurants in Hong Kong have for years been unable to entice workers, owing to their long and tiring hours. And the minimum-wage scheme that took effect in May, says one restaurateur, has made the problem worse. Eric Leung Yiu-chun, CEO of Tao Heung Holdings, which operates a chain of restaurants, says the standardised wage has pushed recruits away from jobs such as serving and cooking as they can get the same pay for less demanding work at fast-food chains and as security guards. Tao Heung is among many firms faced with too many vacant positions and not enough workers to fill them. The company, which runs 68 restaurants in the city and 15 on the mainland, needed 80 staff for a new branch in Hong Kong, but could only find seven suitable candidates. But Tao Heung has made steps to recruit more and boost its work force. A decade ago, it started sending its workers to a training facility in Tai Po. The facility will be upgraded to a fully fledged school for servers and chefs next year. Leung has also automated some processes - including ticketing, ordering and payment - in Tao Heung restaurants to reduce its staffing needs. Eventually, the firm wants to reduce shifts from 10 to nine hours to encourage more young people to join the industry. What is the greatest challenge of being a restaurant operator in Hong Kong and on the mainland? Managing people is the most challenging and critical thing, as it is a people-intensive industry. There is a lack of a ... catering industry [service standard], especially in Chinese restaurants. Over the past 10 years, Tao Heung has been very keen to adopt standardisation and training used by other industries to make our business more sustainable. Which firms are role models for your business? In terms of general management of the company, we learn from all respectable big companies. In terms of operational practice, we look up to other companies in the catering business, such as McDonald's. Of course, our product is totally different from McDonald's, but we want to adopt the quality controls used by them. For example, their burgers, sold in so many countries, [follow] the same standard in quality and processing. It is an amazing job. Apart from quality control of food, how do you improve service? The three [measures] to gauge our business are food, service and environment. Food is the most important. We produce our food in a central kitchen and distribute it to restaurants all over Hong Kong. We procure the ingredients in bulk to ensure food quality and lower costs. As for the quality of our service, the situation of a Chinese restaurant is different from McDonald's. Some procedures must be done on the front line of the restaurant, regardless of how sophisticated our food centralisation system is. For example, all dim sum filling is prepared in the central kitchen but it still needs to be wrapped up and steamed at the restaurants. The cook at the front line still determines the quality of the final product. How do you keep your chefs up to standard? The problem of apprenticeships in Chinese restaurant kitchens is that mentors are usually reluctant to teach their apprentices, which discourages young people from joining this industry. The mentor may only teach 70 per cent and [neglect] the remaining 30 per cent. The same problem also applies to servers in the dining areas, where the newcomers only learn by observation instead of systematic training. How can you persuade mentors to teach their subordinates? We have had Tiptop Consultants, which also advises fashion retailer Giordano, training our frontline staff since 1997. There was a saying that you could only enjoy food in Tao Heung but not the service. We realised we needed to change the concept since we did not want to use low prices to lure customers. However, [introducing] training into our restaurants sparked great opposition from our staff, who thought that the money invested in courses could be of better use [if it was] given to them directly. Against all odds, we set up our own service standard and our own training department. We established an appraisal system to determine promotions from 2004. All employees can [be promoted] by passing a written test, interview, practical test and appraisal from colleagues. What is your staff turnover like? It's very high. The average turnover of staff is over 10 per cent monthly, which means more than one-tenth of the staff leaves per month. But our monthly turnover is in single digits due to a very transparent career path in the company. The [morale] of the servers in Chinese restaurants, however, is relatively low. With more mainlanders coming to work at restaurants, is it harder for local youth to join the industry? We have put forward several training systems to ensure that the newcomers will be well trained and see a clear career path in our company. Ideally it will take only three years for a waiter to be promoted [to manager]. In general, it takes them six to seven years. The chief chefs in our restaurants are in their 30s, on average, compared with over 40 in other restaurants. Still, we find it hard to recruit young people. Youngsters are more willing to work in McDonald's rather than in a Chinese restaurant. Their priorities are [working at] a hotel, a Western restaurant, followed by fast-food restaurants. They don't want to join Chinese restaurants even when they are jobless. In the past, some Chinese restaurants have hurt the industry by withholding the salary of staff and receiving kickbacks. It is a long-term aim to change the image of the industry. What steps have you taken to improve this image? From 2000, we set up a sponsorship programme with the Vocational Training Council (VTC) to sponsor 30 trainees a year in order to raise service standards. The programme was upgraded to a professional diploma [course] in 2005 and the tuition fees are fully footed by us. As time goes by, the course has been increasingly popular, with more than 300 applicants for the 30 to 40 positions available per year. Last year we decided to set up a school with the VTC, alongside our new plant in Tai Po. The two- storey school could enrol up to 2,000 students in the initial stage. Have you seen any changes in the industry as a result of your efforts? The recruitment problem is still [prevalent] but the overall standard of Chinese restaurants has been raised. We recruit new immigrants and provide them with on-the-job training even though they don't have any experience in restaurants. Half of our staff in charge of restaurants are working mums who started off as part-time workers. When their children grow up, they become full-time [workers] and get promoted. How has the introduction of the minimum wage affected you? We find it harder to fill vacancies. The salary of workers in a Chinese restaurant used to be significantly higher than other sectors such as fast-food restaurants, security and cleaning. But now, the salaries of all these industries have been aligned to HK$28 per hour, making more people shy [away from] working in a Chinese restaurant, which is more demanding in terms of working hours and physical strength. People tend to join security [guard] firms. So how would you solve your company's labour shortage problem? We have long adopted automation to reduce the workload of frontline staff. For example, we have automated ticketing to relieve the pressure on the staff at the front door. Some restaurants have been equipped with automated ordering systems and self-service [automatic] payment, which lets customers settle the bill with an Octopus [card]. 2,000 The total number of Chinese branches McDonald's is aiming to have by 2013, as more and more local workers opt for fast-food chain jobs