5 Tips On How To Optimize Restaurant Labor Costs

Push Operations

Every restaurant across the country has the same major concern: labor cost. Its expensive, problematic, and always in flux.

You've probably heard it a million times, but if you're not growing, you're decaying. Successful business owners know that the money they make day in and day out, is ultimately invested back into their business, particularly through their workforce. Achieving the perfect labor cost is a combination of different factors. Here are 5 tips on how to optimize your restaurant labor:

Streamline Communication

By allowing staff and management to communicate on a single platform, day off requests and schedule changes are made more consistent and easy. No more phone calls during rush hours, forgotten conversations, and lost or crumpled written requests!

Staff are also more likely to communicate with one another, and covering shifts will be easier accessible and more stress-free. Broadcasting messages to staff makes communication simple and schedules are easier to create, even with a constant flow of requests. Making work easy for you and your employees will also likely reduce your employee turnover rate!

Eliminate Paper Schedules and Reduce Schedule Making Time

Making schedules sounds simple and straightforward, but with a large amount of staff it can take hours. Sometimes employees will be scheduled for dreaded "clopening" shifts (back to back close and opening shifts). It can be frustrating and tiring for staff, consequently affecting guest experience.

Scheduling mistakes can be costly; confusion and inconsistency with scheduling can often lead to under-staffing or over-staffing. Keeping errors out of scheduling can further aid in the success of calculating labor costs and vice versa. By using different templates or variations of a schedule, allows you to compare the hours used previously, and labor and sales reports allow you to schedule accordingly.

Avoid Understaffing or Overstaffing

Overtime, understaffing and overstaffing will cost you a significant monetary loss. With overstaffing, there is an assumption that sending someone home early is better than not having extra staff around. But in actuality, there is a lack of productivity and you’re essentially paying staff to stand around. Understaffing is quite the opposite; staff are always busy. Not only will your labor cost to sales cost never be optimized, but employee burnout is higher probability, shortcuts are more likely to occur, and guest experiences may be compromised.

Cross Train Staff

You’re purchasing labor when looking for people to fill your workforce. Give your staff more than a pay check, and teach them skills that they can use across different mediums. Cross training your staff will help improve their skill sets, and aid in employee retention.

A solid set of staff who know what they’re doing will allow you the flexibility when creating a schedule. There’s nothing quite like knowing that your business has a solid team behind its success.

Know Your Numbers

If you know your numbers, you’ll know your business. Depending on your workforce management provider, your reports can tell you anything from  labor cost vs your real time sales, to daily employee clock entries.

You have to understand the reports in order to receive an accurate pulse on your business. Like the world’s billionaire restaurateur has said “you cannot be successful in business if 1) you don’t know how to operate what you’re doing, 2) if you don’t understand the numbers of your business and all your costs…

"Understanding your reports and ultimately your business' behavior, will allow you to accurately forecast labor costs, schedule staff accordingly, and make better decisions to improve your business.


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