What You Must Know and Do to Reduce Your Restaurant Labor Cost

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What You Must Know and Do to Reduce Your Restaurant Labor Cost

Labor costs are a real challenge for restaurants that want to make money. Restaurant owners have to battle with a lot of variables to control their labor cost and create success from things that are out of their control. For example, there is rising minimum wage – going as high as $22/hour in some places, labor laws that require a set number of hours for staff, a fear of working people so hard they leave and don’t forget the cost of providing the best service possible. So what is a restaurant owner to do? How can you give good service, keep your team happy and make money?

In this episode of my podcast, The Restaurant Prosperity Formula, I'm answering those questions. Plus I cover how to stay on budget in labor from week to week, how to help your managers successfully manage labor cost and how you, as the restaurant owner, can teach and lead your team to run the right ideal labor cost.

To start, I walk you through the answer to how you can give good service, keep your team happy and make money. I talk about and explain:

  • Budget
  • Dollars per labor hour worked
  • Scheduling software
  • Going into the next week on budget
  • Holding managers accountable
  • Tracking labor daily
  • Analyzing labor after the fact

After running through all those restaurant solutions you can use to control your labor cost, I dive into the information you need and the steps to take to go into the next week on schedule, including:

  • Creating scheduling templates in your scheduling software
  • Grabbing labor target for next week’s schedule from the budget
  • Comparing your proposed schedule with the budgeted hours and dollars
  • How to cut those hours and dollars if you’re over budget
  • Who gets final approval on the schedule

You’ll learn why these steps make an immediate impact on your labor cost and who is responsible for tracking it all.

Restaurant owners and their management team often find themselves over on labor early in the week and then have to cut hours on the busiest shifts. That won’t help you maintain great service! So the rest of the podcast is dedicated to the important process of teaching managers how to track labor throughout each day and what actions to take to keep labor cost under control.

If you want to control your labor, it starts with a budget and goes into proactive scheduling, but if you don't track you're never going to control it.

Click the podcast player above to listen in, or you can watch the video on YouTubeclick here to download the latest episode

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