Solving the Labor Retention Problem in Restaurants with Harri’s Founder & CEO, Luke Fryer

Nick: 00:00:02

There are a million ways to make money in the food service industry. You just have to find one.

On the Titans of Food Service podcast, I interview real life movers and shakers in the food game who cut through all the noise to get to the top. My name is Nick Portillo, and welcome to the Titans of Food Service podcast. Let's jump right into it.

Welcome back to another episode of Titans of Food Service. I'm your host, Nick Portillo. Today I'm sitting down with Luke Fryer, the founder and CEO of Harry.

If you've ever tried to staff a Friday rush or keep a restaurant team engaged during peak season, you know the headaches. Applicants ghosting shifts, getting swapped at the last minute, managers buried in spreadsheets. Luke built Harry to solve those exact problems.

What I love about his story is that it's not just another tech platform thrown at food service. Luke came from hospitality. He literally opened the very first Burger King in Australia.

He knows the industry and he designed Harry to be built for operators, helping them hire faster, schedule smarter, and actually keep the great people they bring in. In the episode, we're going to dive into what's really, what he's really doing on the front line, how he's helping make change.

So we talk about why talent is now the number one competitive advantage, how technology can take the friction out of scheduling and compliance, and why empowering managers with the right tools is the unlock for culture and profit.

He also also shares some practical moves that operators of any size can run with, like cutting down no shows, creating bench strength, and even using scheduling as a retention tool instead of a pain point. This conversation is packed with insights for anyone leading teams in restaurants, hospitality, or food service.

And without further ado, let's go ahead and welcome Luke. All right, Luke, welcome to the Titans of Food Service podcast. I appreciate you taking time to come on and meet with me.

Luke: 00:01:54

Thanks for having us.

Nick: 00:01:55

Of course. Yeah, of course. Tell me, I hear an accent. Where are you from?

Luke: 00:02:03

A couple of old pictures here behind me, but originally from Sydney, Australia.

Nick: 00:02:09

All right, nice. And how'd you get into the food business?

Luke: 00:02:14

ded franchise in Australia in: 1999

It's a much longer story, but the short version of the story is I applied for a job as the CEO of Burger King Asia Pacific. They thought that was quite funny, offered me a job in real estate. I said, I think I can.

I think I can land the ultimate Site which was an exclusive 15 year concession at Sydney Airport for a QSR operation. And I ended up being able to secure that site. And I said, I'll do that if I can be the franchisee.

pened that business in May of: 1999

Nick: 00:03:18

How did you, so you were 21 years old. How did you have so much ambition at that time? I mean to, to, to go for that.

Luke: 00:03:25

I'm not sure if it was. It felt like the right, it felt like a good opportunity at the time. And it was either that or go into stockbroking.

tober, I guess it was October: 1998

And I think the entrepreneurial calling was much stronger. So I don't know if that's, if that's ambition or just, you know, it felt like a good idea at the time.

Nick: 00:04:00

Sure, sure. And so you had, so you opened up the very first Burger King in Australia. How had you ever heard of Burger King?

Luke: 00:04:09

Well, so funny enough, Burger King did operate in Australia and still does operate in Australia, but under a brand known as Hungry Jack's. Again, longer story, but Burger King had decided to directly enter the country and establish our own franchisee network.

And I was the first one of those franchisees. So. And I've been to the us done the obligatory kind of Disneyland trips and all the things you do.

So you know, new, new Burger King both, you know, in both its forms.

Nick: 00:04:40

And how long did you were you there for?

Luke: 00:04:43

iness at Sydney Airport until: 2007

And then in: 2002

Nick: 00:05:16

So working in restaurants I would imagine has led you to where you are now today with your current company.

Luke: 00:05:22

Yeah, absolutely. It was especially my move to New York.

d to New York in Give or take: 2007

You know, very big country, relatively small population. Australia's, I think, fun fact, 3% bigger than the land mass of the U.S. but you know, you've got 27 million people instead of 327 million people.

Big difference, big difference. So, and very spread out population. So you have a small population, which means you invariably have a fairly constricted talent pool.

So it's hard to hire people. It's a very wealthy country. It's, I think it's the world's wealthiest country, you know, per person on a per, per capita private wealth or whatever.

There's a metric that Australia, you know, Australia's a very wealthy country, meaning that, you know, that you don't have to be careful how I say this. People live very, very well. And so you don't have to work too hard to live well in Australia. But the upshot of that is the wage rates are very high.

And in addition to that, there are very complex rules around workforce management. You know, things like overtime rules and hours of work and a lot of penalty rate payments.

And you know, I often say that the working regulations in Australia make California look like Texas on a, on a bad day.

And so when you put small population, high wage rates together and very arduous workforce regulations, you know, for a labor intensive business like restaurants, it's a tough trial.

And certainly when I moved to, everything looked easier from, you know, when you're in Australia, looking at all these complexities, looking at the US that looked like a much easier place to conduct business as well as obviously being a much larger market.

And I guess came here in: 2007

e out of a recession, call it: 2009

The cutting edge technology at that point in time was Craigslist, which was a really inefficient way to try and hire people. And so we started to, I saw themes like, actually it's starting to get hard to hire people.

If we think back to: 2011

And so kind of collectively you started to see these themes starting to emerge quite quickly that I thought I'd left behind in Australia.

And there was certainly know, Harry started as a hiring platform and we, we started predominantly to solve initially that hiring issue, and then we evolved to much more than that later on.

Nick: 00:08:57

Yeah, here in California, we just moved to 20 bucks an hour, you know, for fast food, which, yeah, may just be fast food, but then it puts pressure on other industries, you know, other retail outlets, other restaurant types. Because then, you know, people are like, hey, I can go work at, you know, let's say burger king for 20 bucks an hour.

Why would I work here at XYZ for 17 an hour? That doesn't make sense.

Luke: 00:09:21

Yep. It lifts the floor and it compresses the verticals. You get that compression.

You know, we've seen that in, in California between the hourly and managerial positions. That was where it was most acutely felt because if the manager was at 21 and now the crew members are $20, that actually created the most complexity.

And then that adjacent industry issue that you speak about, that also was because what happened in California was the most acute and industry biased shift in a minimum wage rate the country has ever seen.

You've never seen a jump from, call it 16 to 20 just in terms of that percentage increase in such a short period of time focused only on one industry. Absolutely unprecedented. And of course, now they're talking about $30 minimum wage in New York.

Nick: 00:10:15

Are they really? Wow.

Luke: 00:10:16

Yeah, that is on the docket of the, you know, one of the mayoral candidates. So we'll see how that goes.

Nick: 00:10:22

Yeah. Wow, that's, that's a big number. So how. So you started your company on the hiring side. So tell me, how does that work?

How do you work with, you know, restaurants, qsr to bring in new talent?

Luke: 00:10:39

We started on the hiring side.

Look, it was the real, real story on it was I moved here, I was 30 and I was single and I was helping a friend of mine, if you will, you know, work dating, you know, interact with dating sites. And if you think of match.com, right, what happens on match.com you've got supply and demand.

Without getting into the conversation of in the New York City world of dating, who's supplying, who's the client? You've got a marketplace, right. And they bring people into that marketplace.

And instead of it being a, you know, a classifieds ad where you, you know, you put something in a newspaper, it's, you know, you build a vibrant profile, you input information about yourself and in the background there's an intelligent match between you and someone else that, you know, that's the whole basis of it.

Back In, I guess: 2010

And that was very successful very quickly. So I think the first thing is how do you present like this is a frontline business, you're a customer. Generally we're customer facing people.

Whether we own the business, most of our positions are customer facing. How do you allow people to present themselves, present their personality much more than you could on a mono dimensional cv. Right.

And likewise, how do we let our employees put their best foot forward from a branding perspective and create that kind of vibrant marketplace? So that's where we started. Today.

We've been able to bring a lot of kind of AI, a lot of rich media and a lot of different technology to that, call it matching process. That's also pretty big. Right.

There's 30 million people have come to Harry and built profiles and we're very much secretly, somewhat, we don't talk about this too much because we're mainly a software company. But that network we've built is 30 million people strong and it's quite a powerful connection.

There's about 3.8 million connections a month made between candidates and businesses on our platform.

Nick: 00:12:57

Wow, that's huge.

So someone goes on, sets up a profile, kind oflikeamatch.com, like you're saying, where essentially they, you know, probably a photo of some sort, maybe little bit about their personality and what makes them unique. And then the, the restaurant has access to these profiles, do they? They, I would imagine they have some sort of subscription to your platform.

Luke: 00:13:19

Correct.

Nick: 00:13:20

And then they get access to the database of qualified candidates. I would imagine you probably filtered. Filtered out from, you know, different things that they're looking for. Is that kind of how it works?

Luke: 00:13:32

Yeah, I think, I mean, look, the beauty of your program is the focus on food service. So that I can go into just a little bit of detail here. Yeah.

You know, one of the things we do is we look at someone's experience where they've worked and we actually have broken the restaurant industry down into something 16 different categories, not very sexy. We call it Hex, the hospitality establishment classification standard.

But the reason we did that is that we needed to really define the difference between QSR and fast casual and fine casual and casual dining. And what does family casual dining versus neighborhood versus upscale casual versus fine dining.

And there's, you know, there's a difference between a dive bar and table service cocktail lounge. And they actually attract different people.

And based on someone's experience, we needed to be able to properly catalog someone's experience based on where they work so that we're recommending the right kind of both positions and restaurant types for them to work at. And you know, that kind of underlying data backbone actually makes the whole matching game far more effective.

And so our customers use this today as a software platform. They use this as an applicant tracking, an onboarding tool. But interestingly, what feeds that is, they go and post a job.

And one of the places that job goes to is our marketplace. And there's a lot of people there and there's some really smart matching technology.

So that's, that's sort of one part of what we, we do that, you know, the industry actually, we saw it, we started Harry to solve a hiring problem. The industry actually doesn't have a hiring problem.

Even in the bleakest of times when, you know, the hardest times to hire, there's always enough jobs and there's always enough candidates. Matching people is getting smarter and more efficient. The biggest problem we have is a retention problem, right?

So, you know, if we think in limited service where we're running probably 105% average turnover, then through into full service dining where we're probably running 60 to 70% and this is an average, obviously managerial positions are lower, hourly positions are higher. If you think of that turnover rate, that's where our real problem as an industry lies and why we have to work so hard on hiring.

Everybody knows this, but just the sheer physics of that kind of replacement rate really evolved our thinking.

And as we started to work with clients as their hiring platform, we, we began to see, I knew as an, I knew this intuitively as an operator, but when you start to work with customers who have a thousand locations and running 110% employee turnover, and you see how much infrastructure and effort needs to go into bringing that many humans into your organization every year, you start to think, well, how do we actually solve that problem? Because the hiring problem at its root is a retention problem.

And so we just started to do thousands of exit interviews and I picked up the phone personally to hundreds of people who, we really focused on people who had kind of left in the first 90 days of their job.

And when you pick up the phone and say, look, you joined XYZ company and why, why would you, why would you have left in three weeks and just you got such a compelling story back around something to do with the schedule. I didn't have enough hours. I didn't have predictability. Like I wasn't getting the same schedule.

It didn't make the time that I was available to work because so many people are obviously, you know, working in a restaurant, around something else in their lives, around another job, around school, around whatever commitment they may have. And so these themes, sort of 2/3 of people were leaving who left in sub 90 days. We call that short cycle turnover.

They were leaving because of something to do with their schedule. So what started as a hiring problem and very quickly became clear it was a retention problem actually became a schedule problem.

And if you could figure out a way to stabilize the scheduling issue by making it easier and more flexible for employees to get the hours they wanted, but in a way that works for businesses.

And businesses have really serious cost and coverage and compliance needs that they got to balance, especially a place like New York City or where you are in California where you, I mean that is a real juggling act to get that right. And invariably the kind of legacy approach of a lot of tech, you have to use technology at some point, certainly at scale.

Legacy technology just hadn't got that, that balancing act right. And we saw that as a big opportunity.

So come around: 2018

Nick: 00:18:48

Very one.

I like what you did where you picked up the phone and you called people and got their stories and you know, what started as a hiring tool in one way, it transformed into a retention tool as well. So tell me a little bit more about how you are drilling down and really helping, you know, these operators with retention.

Luke: 00:19:11

So I think it, I think it really, it, it starts with under understanding and it varies client, you know, client by client, what is, what is causing turnover. So it actually starts with yes, getting scheduling right helps a lot.

Like equitably distributing shifts, giving people predict, making it easy to give employees a predictable schedule, ensuring that employees have easy access to flexibility.

Meaning, you know, I can pick up a shift or I can drop a shift within reason and within rules and I can, I have that flex again, I'm working, I'm working a shift role because inherently I'm looking for flexibility. So give that to me, make, make it easy for me to access that.

So I think the first thing is we're addressing that key, key point of friction around schedules by just delivering smarter tools for both the employee and the business. You know, part of that, by the way, is, is all of that has to be built on a foundation of better understanding what's going to happen.

Because your schedule ultimately needs to provision employees relative to your expected flow of customers. I mean, that's just how our world works.

Unless you're lucky enough to be one of those fully automated business businesses that has one employee and a whole bunch of machines, I don't think that it's too many of those, but it's not yet. And so actually grounding customers with a fantastic demand forecast is actually the first thing you gotta do.

You've gotta get really, really sophisticated in understanding what the anticipated flow of customers is.

Not on a weekly basis, not even on a daily basis, but down to really an hourly level, because we deploy people on an hourly, and even break that down further coherently, you can do this down to a 15 minute level.

And when you get into the science of demand forecasting and all the firepower that AI can bring to that today without giving people an aneurysm, because at the end of the day, what those machines do in the background, AI loves that kind of stuff, right? So the foundation of a great schedule has to be established by understanding what's going to happen in the business.

So I think that's kind of bucket, bucket number one is accurate scheduling.

But the second thing is, and you know, if you think about the constituency that works predominantly in restaurants, I think 65% of our workforce is age, you know, 18 to 30. That demographic, you know, I'm just a year or two after 30 myself, so I really understand this demographic very clearly.

They, if you ask them how they're feeling, they will tell you really like groundbreaking technology required. Especially if the mechanism you're using to ask that question is a native tool like sns, right? Or if it's a mutual tool.

And today, understanding the voice of your employee, their mindset, you know, how they're thinking, how they're feeling, it is easier than ever before.

And if you are rigorous and heartfelt in your approach, because the best operators really care, because they know that a genuine approach to understanding what is making employees happy or not happy at work drives so many fantastic outcomes for the businesses, all the best operators have this as a key Operational priority. It's just really hard to execute at any kind of scale. And scale meaning how many employees can you connect with?

And so the second thing we do is help customers understand that voice of their employee and actually turn that into a, you know, turn that into data that can be used to quite accurately predict if an employee is looking to, you know, potentially leave or, you know, if performance is declining, whatever the case may be.

So capturing and understanding employee voice and using that to predict the health of the business by really intercepting turnover, that's kind of like key bucket number two. It's a big deal for retention.

Nick: 00:23:18

Yeah, no kidding. So you mentioned, you know, data and AI and in, in the food service world, there's so much conversation.

I mean, probably in any industry or in every industry there's that talk around AI and how it can help, you know, will it replace human interaction? How can it help, you know, us make decisions, all these different things.

How are you using AI within your business to help these, you know, food service operators on their, you know, on the operation side, in their employee retention side? How do you, how are you using that?

Luke: 00:23:51

I learned very early in my career this kind of simple rule. But a product is what you get, service is how it's delivered to you. But hospitality is how it makes you feel.

And it doesn't matter which part of our, which segment of our industry you're in, whether it's Burger King or one of, you know, or a fine dining restaurant, that hospitality layer is absolutely essential.

So everything we're focused on doing from an AI perspective predominantly is about giving operators back the time they need to deliver that hospitality layer. And that's two things. More time to interact with guests, more time to build the soft skills of employees that time.

Those skills that can only really be delivered from a great manager to an employee. So we want to predominantly, we're very focused on the manager Persona.

We're very focused on eliminating the things they do that a machine can do better, faster, easier, today, getting rid of the grind work. So that's how do you schedule faster and more efficiently? How do you more efficiently run operations on an intra daily basis?

By predicting things that need to be done, letting them know what they need to do before they've even thought that they know to do it, that they need to know to do it.

And that is if you think through these workflows, it's what's happening with my sales, what's happening with my labor, what's happening with my compliance issues, what are my customers saying? How do I need to react all of those things. Using AI to anticipate, predict and prompt, but not execute an action.

Nick: 00:25:35

I met this guy many years ago and he started a business in the dental, in dentistry.

And he essentially said, I create this platform that I helped dentists run a business because dentists are great at what they do, but they don't necessarily know the framework of running a business, which I thought was a very. I never even thought about that. Like, yeah, this person is super skilled at what they do, you know, working on people's teeth.

In the food service world, I've come to find there's, you know, especially there's a lot of culinary people that start, you know, they're a chef and they start a restaurant and they don't necessarily know how to run a business, but they're very good, they're an artist, they're good at what they do. So essentially, you're kind of providing a framework to these individuals and to these businesses that says, hey, I'm going to help you.

You know, you're going to create great products, but we're going to help you with the service and the hospitality side of the business to help you thrive and grow.

Luke: 00:26:28

I think the key promise there is we're going to help eliminate the things that distract you from doing the things that add the greatest value to your business. And again, very focused on the manager, per se owner.

Because when the manager is at what I call the pivot point, there's that kind of magical place that you have in any restaurant where you can see what's going on in the kitchen and what's going on front of house.

And if you're in control and you're properly staffed and your staff know what's expected of them, and, you know, you have a good sense of what the flow of customers are going to look like, and all these things have gone well, then as a manager, you can stand at that pivot point and be in control and control quality and interact with guests and help staff. And that's when it's humming. That's when guests are having a great experience and that's when employees enjoy their job.

What can we be doing to give, to deliver the kind of stability and preparation needed to keep people in that, keep managers in that position of calm and control.

Nick: 00:27:32

What do you think the future of frontline managers is?

Luke: 00:27:36

I mean, there's a view of the world where all the people get replaced with humanoids. And the humanoids are just.

I mean, that, that will come in some way at some point over the next five years we will see certain roles that are better done not by a fixed position robot, but by a humanoid personal view. I think that that is, you know, pick a number, somewhere between 5 and 15% of the distributable hours that you have. Right.

That still leaves a lot of people to be managed by managers and it also leaves a lot of people in the more high value positions in our businesses, the ones that are doing the tasks that may be too hard for it, you know, not practical for a humanoid. I don't see customers lining up to interact with humanoids at any particular point in time. In the near future.

Again, all of this can be subject to change. But it.

Nick: 00:29:21

Of those 5 to 15% of hours that can be taken on by a humanoid, what would those tasks be?

Luke: 00:29:28

So I think there are certain, I think there are certain roles that are, that are, you know, unnecessarily dangerous for a human. Right.

So if that's changing fry oil, if it's certain kinds of lifting, if it's walking around, sweeping up the driveway, sweeping up the dining room, I think there are, I'm not going to profess to be a humanoid expert. I, you know, I, apparently I can spend $5,900 on a humanoid and have that person, that, that, there we go.

Have a humanoid come to my apartment and constantly clean and all I've got to do is charge the battery every two hours. So I, I'm sure that that will, that will make its way into that kind of labor replacement. The very arduous, repetitive, non fulfilling tasks.

I'm sure that those can, will be addressed over the next five years. Does that allow us to plate, you know, a dish that someone's going to pay $45 for in a, in a upscale fine dining restaurant?

I don't think that is an easy thing to replace. I don't think that applies to service at a table. I don't know if that applies to, I don't think that applies to service at a bar.

And you know, I think you'll continue to see humans respond negatively to machines replacing the hospitality layer.

Nick: 00:30:50

Yeah, I can totally see that. You know, I'm for me in the food service side, I'm on the sales side. So I sell two restaurants. They sell my com, my clients products and whatnot.

And it's funny, I joke with friends who are, you know, in other industries that in a way what I do is a little antiquated maybe because there's so much of that human touch that still exists, but there is a lot that I see in my team or myself in my day to day where I'm like, if, if I could off offload these tasks in an automated way, it would free me up to do more deep work to do, you know, really push towards the things that can help move my business or my day forward.

And that's, I've never thought of that in that perspective of someone, you know, because I remember growing up as a kid where parents, we went to Brookstone and we bought this thing called a Roomba and you turn it on and it goes around the house and it in, it vacuums and it wasn't a perfect thing. But what an idea if you had that in current day, you know, at a restaurant, cleaning or sweeping or whatever it may be or changing fry oil.

Luke: 00:31:51

I mean the irony there is that on Sunday morning I was, you know, doing my very cathartic vacuuming session with my Dyson and actually cleaning the Roomba that had been sitting there for two years and hasn't moved. Yeah, that's probably your main thing.

Nick: 00:32:08

Totally. So looking into the future, what do you, what do you hope to achieve with Harry that you've not yet achieved?

Luke: 00:32:15

Crossing the chasm from being an employee management platform to a performance, you know, a performance driving platform as in revenue performance.

We'll cross that chasm in the next, in the next six months we will go from a place where we help hire employees, help schedule and deploy them, to actually align their intra daily performance with the top line of the restaurant. Not in a kind of, you know, whimsical hr.

And I don't mean that as there's not a direct connection between the performance of HR and the performance of a restaurant, but not in an HR kind of way, in a direct operational way. Here's this thing we whatever this thing, here's this thing that we are going to do this day, this week.

Here's a goal and we're going to track to that goal and we're going to hit that goal. And that goal is going to be great for the business and it's going to be great for the employees.

It's a very interconnected and evolved sense of employee engagement that's directly tied to bottom line performance of the restaurant. And how do you kind of democratize that technology across this very large workforce? These things happen organically today.

Nick: 00:33:32

Right.

Luke: 00:33:32

There are contests like I remember I had, here was my Burger King, there was a heat shoot on the pass in front of the heat shoot. I used to stick a piece of paper and put some sticky tape on it, I put six columns on it and there was a pen.

And every time one of the cashiers upgraded a customer, they'd go and score it. And whoever upgrade, whoever sold the most upgrades in any given shift to get back then 20 bucks. That was a lot of money.

But every time I ran that, you couldn't run it every day. But every time I ran that competition, my sales would be 10, 12% higher in the shift.

Now that same, I mean that if you think about that kind of opportunity to drive intra daily performance, whether it's competition between employees, competition between locations in an area or even on a regional basis, that is where you can take, you can kind of be the people system but you can bring yourself much closer to the performance curve of the business. Sure.

Nick: 00:34:32

Luke, for those listening along, what's the best way to connect with you? Connect with Harry and learn more.

Luke: 00:34:38

We have a website which I will say after three years is about to get a major facelift which is harry.com but for my sins I'm very easy to reach on lukearry.com and you know, I love hearing from potential existing customers of course, and potential customers so you could reach out that way.

Nick: 00:34:56

Fantastic. Luke, thank you so much. I appreciate you coming on and sharing more about you and Harry.

Luke: 00:35:01

Nick, thanks so much for having us.

Nick: 00:35:02

Of course.