Controlling Your Restaurant Labor Cost

Handling restaurant labor cost is a constant struggle for a restaurant manager, but there are ways to minimize the for a restaurant manager, but there are ways to minimize the headaches associated with it. As you know this is a crazy business and you just never know what’s going to hit you at any given time, We are all well aware of those times that you feel will be slow and you staff accordingly, you’ll no doubt get swamped, and those busy hours that you staffed up for will be filled with assigning tasks to the people you have standing around because it is dead. I hate to tell you, it’s never going to get any better. But here are a few good pointers to minimize the costs and headaches associated with those happenings.

Volume Assesment

The first and most effective restaurant labor cost tool is proper volume of business assessment. Many managers just figure they will need a given number of employees on a given day and shift, but is there any reasoning behind these decisions? Far too often the answer is no.

To be effective at forecasting you need to consider what your trends have been and how many labor hours you have been assigning to handle the amount of business you have been doing. The most effective way to do this is by entering each day into a database or spreadsheet and then graphically compare like days of the week from past months or even years. We have made this easier for you through our period track excel software program that you can get in our resource center.

Considering that you are not using it yet, there are other ways too. Most computer systems keep historical data so you can look back. Pull the sales data for the past month and enter it into a spreadsheet in a week per week format so you can compare days of the week separately. What you need to do with this data is find your average daily sales for each day of the week.

Now you need to break each day down into meal period if you do more than one service (breakfast, lunch or dinned) for each day. I realize that this involves some work but fortunately you only have to do it this once if you start using the period track program as I suggested. Once you have this data your on your way to controlling that restaurant labor cost.

Now you need to assign a number to those daily shift sales figures, and that is the number of each service or support staff personnel you need for each period. Now take a good look and make sure that none of the numbers are below what you feel is your minimum level needed to just open the doors.

Keep in mind the work needed to be accomplished (side work, opening and closing duties etc). Controlling restaurant labor cost is designed to help you control labor cost without skimping on your service standards. Now that these estimates are made and you feel comfortable with them it’s time to cover your butt.

Stacking The Deck

Take out your last schedule. From the top down go employee by employee and assign each a number 1-5 (1 being the weak and 5 being strong). You need to be objective here but this is not a review just a personal evaluation. Keep your personal feelings about each employee out of the assessment do it on just their work since that is all that effects restaurant labor cost.

You have done a good amount of work to control your restaurant labor cost to this point, but it will all be worth it in the end. Now your ready for the second best labor saving trick; stack the deck. When you make your schedule make sure each and every shift has at least one of your fives, and that your strongest periods of the week have a proportionate level of your fives. I hear your concern already; my fives aren’t going to like this shift or that one. Well, first off, the employees are first and foremost there for the good of the business. Secondly it’s up to you to sell it to them, and by making it more equitable when filling out the rest of the schedule.

Cover Your Butt

The next best "cover your butt" trick is cross training. This will take some time and effort, but there is nothing like having a hostess that has at least the basic skills needed to pick up a table or two. Having your servers keeping an eye on the hostess stand after they have been cut will save on the labor cost even more. The benefits of having the option to pull a bartender off the bar and serving drinks properly to tables are enormous. Teaching your dishwasher to be able to put up salads and work the cold side, priceless!

Nothing beats having a staff full of fives which, but this will take time and until then these tricks will surely pull you through those crunch times and reduce your restaurant labor cost. Now you can do what you do best; making sure everyone is working and your guests are ecstatic.

Take out your last schedule. From the top down go employee by employee and assign each a number 1-5 (1 being the weak and 5 being strong). You need to be objective here but this is not a review just a personal evaluation. Keep your personal feelings about each employee out of the assessment do it on just their work since that is all that effects restaurant labor cost.