How to Minimize Restaurant Labor Costs
Labor costs are one of the highest expenses for restaurants, in part because it’s one of the more difficult variables to control. Labor is necessary; you can’t get through a dinner rush without good cooks and well-trained servers.
As restaurants struggle with overstaffing problems, high turnover, rising minimum wage, and labor laws in flux, they’re increasingly relying on these five ways to reduce labor costs.
1. Streamline staff schedules
Over- and understaffing are real problems for restaurant owners on a day-to-day basis. As sales fluctuate depending on the season, day of the week, mealtime, nearby events, upcoming holidays, and many other factors, management needs to assess all of these variables when making the schedule.
Smart technology is here to help. Advanced Point of Sale systems track data so you can see how busy you’ll be based on sales history; that informs how many employees you’ll need a different work station on any given night. Integrate scheduling software like 7Shifts, which significantly reduces how long you spend working out shifts and lets employees swap them online without managerial approval. You don’t have to worry about last-minute call-outs and no-shows giving you a headache.
2. Improve management
Optimize your managerial team to watch that good behavior trickle down to junior roles. Managers are supposed to keep the business running how you want even when you’re not around, so equip them with the skills and knowledge to do so effectively. Convey your professional goals so they know exactly how to keep the restaurant at peak efficiency; for example, track of employee hours so they don’t go into overtime.
3. Hire smarter
Invest in staff from the get-go, so they start on the right path. Employee turnover is a massive problem for restaurants, as continually recruiting and training new workers leads to high labor costs. Improve your job posts to attract better-qualified candidates by offering competitive pay and benefits so they’re motivated to work harder. Cross-train employees to improve their overall efficiency and the likelihood that they’ll stay loyal to your brand as you equip them with relevant skills and show your investment in their long-term career.
4. Treat your workforce well
Taking on a mentorship role motivates your staff to work harder, which improves your labor cost percentage. Show how much you appreciate their sacrifices by celebrating their achievements, gifting rewards for those servers who net the most profit or taking hardworking shifts out for a company dinner. Even a direct thank-you goes a long way. Use pre-shift meetings to highlight superstar workers, clarify aspects of the business the team handles well, and showcase the month’s employees to encourage the rest of the staff to follow in their footsteps.
Show your employees where they fit into the grand scheme of operations so they see how their everyday actions matter and how they affect the rest of the team and the workflow throughout the chain of command. Improving their productivity bolsters the rest of operations, so streamlining all your workers will reduce labor cost significantly.
5. Cutting-edge technology
Invest more now to get more later. Spending money on advanced Point of Sale systems like the one powered by eatOS ultimately gives you access to superior reporting and analytics, workforce management features, integrated scheduling software, and more so you reduce your labor cost percentage in the long run. Short-term investments save you more later.
Schedule a demo with eatOS to learn how we’re ushering in the future of food service, today.