Easing the Burden of Labor Costs at Your Restaurant
Article written by David Eschler, Senior Manager of Restaurant Operations Consulting at US Foods. Originally published March 8, 2017.
Often cited as the second highest cost to running a restaurant behind food and beverage costs, labor costs are a major concern for three out of four operators today [source: DataSsential 2016 Operator Survey]. The problem with labor costs is there is no one-size-fits-all solution. Where rising minimum wage and changing labor laws may be the culprit to some, others may find their labor costs are out of whack due to inefficient employees or overstaffing. The good news is, there are a few simple steps that every restaurateur can take to help make labor costs most manageable.
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How to Ease the Burden of Labor Costs at Your Restaurant
1. Right-size your staffing.
Schedule your staff based on expected sales volume and trim labor during unexpected slow periods. As sales fluctuate, it’s critical to maintain a labor cost percentage that allows you to turn a profit. The “set it and forget it” approach to scheduling can lead to unnecessary extra hours during the slow times and a dip in service levels when peak times change. There are a number of scheduling tools on the market today to help ensure your scheduled labor hours meet expected sales volume. I recommend checking out Homebase.
QUICK TIP: Don’t just copy and paste last week’s schedule. Looking at sales data and taking some extra time to plan for the week could save you hundreds of dollars.
2. Hold management accountable.
Your management team is an extension of you and should have a solid understanding of your business goals and an understanding of what their role is in helping to achieve them. Incentivize your management to meet labor goals. Your managers can’t keep costs in line if they don’t know where they stand. Hold them accountable to a labor percentage and bonus them when they exceed expectations. Overtime is another unnecessary additional expense that your managers should be required to avoid.
3. Hire great people.
This seems like a no-brainer, but the right people make all the difference. Invest in your staff. Hire great people, train and treat them well. Turnover can be fatal for a restaurant that is already struggling. Implement a system to recruit, screen, interview, onboard and train new hires. Well-trained employees will work more efficiently, stay with you longer and provide a more consistent level of service to your customers.
QUICK TIP: Invest and celebrate your staff. Cross-train your employees so they can learn new skills, fill in for no-shows, and be ready to take on new roles. Hold pre-shift meetings and family meals to build camaraderie and show your staff they’re valued.
For more tips and tools for addressing labor costs and managing your business, visit usfvalueaddedservices.com. If you’re a restaurant owner located in the United States and are interested in an in-depth analysis of your business, schedule a visit with a US Foods Restaurant Operations Consultant.
This article was originally published by David Eschler on March 8, 2017.