Dive Brief:

• Presto, a front-office software platform for foodservice and hospitality chains, has secured $30 million in growth funds, the company announced Wednesday. The investment round was led by Recruit Holdings and Romulus Capital, with I2BF Global Ventures, EG Capital and Brainchild Holdings also participating. 
• The company will use the funding to bolster its artificial intelligence technology, which forecasts staffing needs to improve restaurant retention, server efficiency and customer convenience. Presto will also grow its Presto Wearable, which gives restaurant staff instant notifications of real-time operational or guest concerns via a smartwatch-like device, and its PrestoPrime Tabletop, which allows diners to place their order and pay the bill from their table without waiting on restaurant staff. 
• Restaurant employee retention app ShiftOne also finalized a $2.6 million supplement to seed its funding backed by The Entrepreneurs' Fund on Tuesday. Bowery Capital and NRD Capital also participated. 

Dive Insight:

The investments in Presto and ShiftOne reflect the restaurant industry's growing need for labor efficiency. Higher wage pressures and a historically low unemployment rate has hurt the segment, as there is less demand for hourly restaurant work. This shift is expensive — according to data from ShiftOne, the cost of a single frontline employee quitting is more than $5,800, and the average hourly U.S. turnover rate is 102.8%.

Investing in technology that can prevent understaffing and improve operations for servers could help retain current employees and attract new talent.

Seventy-three percent of younger employees, many of which fall under the millennial and Gen Z demographic, want to work at a restaurant with a good reputation, according to research from the National Restaurant Association Educational Foundation. 

Running an efficient front-of-house can be a powerful recruiting tool — and antidote to worker turnover — for chains across segments. ShiftOne, for example, boasts that its technology leads to 4% to 15% gains in per person average sales and promotes a healthy workplace culture. Presto also claims that its smart dining system positively impacts the guest experience. According to Cornell University, 75% of guests surveyed said the system improved their overall experience with 81% saying the technology increased the chances of a return visit.

But while smartwatch-like technology such as the Presto Wearable can help keep servers on top of real-time issues and improve accountability via a digital footprint of employee and guest interactions, they could also have drawbacks. The Spoon posits, for example, that a server that has a history of poor guest interactions and reviews archived via the technology could be moved to slower shifts in order to optimize guest experience. This could cause employees to be wary of the tech, rather than view it as a convenient tool.

Still, the company is partnered with casual heavyweights Applebees, Outback Steakhouse, Denny's and others, which suggests its value proposition is holding true. The biggest question is if labor-efficient, customer-centric technology can offset the cost of implementing technology like Presto and ShiftOne and shifting staff to new scheduling and notification models.