Why restaurant ordering kiosks won't replace employees

Although several quick serve restaurant giants, including Wendy's and McDonald's, are experimenting with self-service kiosks, it has very little to do with increases in minimum wage, despite what many media outlets have suggested. It's true that the minimum wage issue picked up steam last year when the New York government decided to increase the wage to $15 an hour over a 3-year period and other cities, including Los Angeles, Seattle and San Francisco, have also passed measures to gradually increase the minimum wage. Republican politicians and business owners have argued these types of measures will kill jobs, particularly in restaurants, and several QSR franchise owners filed complaints regarding the wage increase as well.

While many reports claim that the restaurants now embracing kiosks are a direct result of minimum wage increases, that's not the whole story, however. It's important to note that many chains were deploying kiosks before the push for a $15-minimum wage picked up steam in America. A study by the Digital Screenmedia Association in 2011, found that 21 percent of all QSR restaurants were planning to deploy self-ordering kiosks, for example. Also, in 2011, McDonald's deployed 840 kiosks across Europe. The goal of this deployment, according to a McDonald's spokesperson, was not to decrease jobs but to improve customer service.

"Self-order kiosks are not designed to replace front-counter service," a spokesman for Mcdonald's Europe said in the story. "Front counters remain a focal point of service where we have installed self-order kiosks, and customers can decide whether they wish to place their order at the counter or through kiosks. Staff are on hand in the dining area to assist customers using the kiosks."

Where are all the kiosks?

Although Wendy's and McDonald's are relying on kiosks in some stores, neither QSR giants plan to deploy them in all locations. McDonald's has been trialing its kiosks worldwide but has announced no plan for a global rollout, and Wendy's franchisees may choose when and where to add them.

"We plan to make the technology available to our franchise system by the end of the year," said Bob Bertini, senior director of corporate communications at Wendy's in a statement "It will then be up to our franchisees to determine whether to utilize kiosks based on the needs of their individual restaurants "Early news reports, stating that kiosks would be in all restaurants by the end of the year, were not accurate."

Most of Wendy's 6,000 locations are franchisee-owned, especially in states, such as New York and California, where people are  pushing for substantial minimum wage increases, according to a report by Investor Business Daily.

"We are always looking for opportunities to enhance our customers' restaurant experience and technology is helping us do that in ways that would have not been possible a few years ago from mobile ordering and pay[ment] to self-service kiosks," Bertini said in a statement. "We're also exploring greater use of technology to help mitigate rising labor and other costs."

How kiosks redistribute labor, not cut it

Although Bertini may add kiosks in an effort to reduce labor costs, others don't see the correlation. First, most QSR customers use the drive-thru. In fact, it accounts for 70 percent of McDonald's business. Unless the company decides it wants to drive more customers through the front door, kiosks will not eliminate the demand for employees, according to Rahi Roshandel, vice president of hardware engineering and product management at PAR Technology.

Another issue is food preparation time. Since the use of kiosks leads to orders being taken more quickly, employees will need to fill orders even faster than they do now. Unless the restaurant wants to slow down the average ordering time, it cannot get rid of employees. In fact, it might need to hire more employees to keep up with demand.

"In a QSR environment, it would be not right to think [the kiosk] is going to replace employees," Roshandel said. "If the kiosk implementation is bringing more people into the store, how can they go ahead and replace the employees?"

Just ask Panera

Panera Bread's experience backs up Roshandel's point. In 2014, the chain launched Panera 2.0, which was designed to implement mobile ordering and self-ordering kiosks. The company has since reported an increase in sales by 6.2 percent and hired an additional 1,700 employees for bakery staff operations in 2015, according to a report by statista.

According to a report by Technology Review, while technology might cause a temporary decrease in jobs, in the end it tends to increase the number of jobs available.

Unmanning the restaurants?

The only way QSRs could completely eliminate employees would be to rely on unmanned automated stores, which are filled with nothing but vending machines. Andy Puzder, CEO of Hardy's and Carl Jr,  has expressed interest in creating a fully automated restaurant, such as Eatsa, which allows users to order on a kiosk and pick up their order without seeing any employees. However, Eatsa does have five to six employees to make the food in each location and they also have a technical expert to aid customers, according to a report by NPR.

Puzder admitted that automation technology currently wouldn't be able to accommodate all the intricacies of kitchen duties, and older customers might be uncomfortable with a fully automated restaurant. In other words, the kiosks' abilities are limited.

There are other issues with fully automated restaurants as well, such as regular maintenance, difficulty making fresh food and managing glitches.

Kiosks are incredibly useful tools for self-ordering and self-service and if implemented properly can help human employees improve customer service and lower labor costs. Smart brands will use a combination of kiosk and humans to better serve customers.