6 Tips For Reducing Labor Costs

Sunny Stree

Labor, food, and beverage are the three big costs when it comes to managing a restaurant, and controlling those costs can make or break your restaurant. Labor is the simplest (said with a grain of salt) to control. With food and beverage there is food waste, over-portioning, shrinkage, and theft of ingredients. There are more variables you have control over when it comes to labor.

1. Schedule smart

Having a powerful POS can help you schedule smarter. Look at your business and determine your slow and busy shifts. One of the biggest mistakes when it comes to scheduling is overbooking your staff or copying and pasting from the week before. If you have a historically slow Tuesday evening, don’t have a full staff on hand. This also includes keeping an eye on your community and major events in town. Read our article 6 Tips for Easier, More Effective Scheduling to learn more.

2. Reduce turnover

The restaurant industry has one of the highest turnover rates across all industries. Constantly looking for new employees and spending time training them can seriously increase your labor costs. Read our three part series on Employee Retention: Salary and BenefitsCulture, and Community.
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3. Think about wages

The easiest way to reduce labor costs is to cut pay, but this should be your last resort. Cutting pay is the quickest way to lose your staff. Instead, think about the proper balance in your restaurant between part and full time employees. Full time employees can ultimately keep your turnover rate down as they’ll be more dedicated. Part time employees are key for filling in the gaps during your peak hours without having to over staff for lull times in the restaurant. Some industry experts suggest a balance of two thirds full timers and at least one third part timers.

4. Increase productivity

Helping your staff be the most efficient and highly trained as possible can mean you can schedule fewer people to handle the same amount of business. The goal here is to become that well-oiled machine, turning tables and closing out tickets like the pros. This also means really thinking about your restaurant design. Do your front of house staff have to constantly lug boxes of supplies from one end of the restaurant to the other? How can you better improve the layout to increase efficiency? Where are the biggest bottlenecks in your restaurant? In this consideration be sure to properly equip your employees for success: supplies, tools, the right amount of plates and cups, down to the very last spoon.

5. Training

Another way to increase productivity is to continually train and cross train. Too many restaurants only hold one training session for an employee when they first come on. Retrain your staff on key service points, ensure they are up to date on any specials or new procedures, and crosstrain them. This can be a major help if you have a big rush of guests and find yourself with one too many bussers and are short an expo or cook. It will also help your staff more deeply understand the running of the restaurant as a whole.

6. Side duties

Every server has their side work to do: rolling silverware, wiping down counters, and the like. Make sure these can be done quickly and effectively. You don’t want your staff wasting precious time trying to stock a counter because the storage area is a disaster. This point is all about organization! The more organized, the more quickly your servers will complete their side work.
Accounting for on average 30% of your overall costs makes it worth every penny to explore these 6 tips for managing labor costs. Let us know how these methods work for you in the comments below!


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