Cost ReductionStaff

Fundamental Best Practices to Stabilize Your Labor Costs

As restaurateurs, we strive to give our customers the best meal they can afford. Doing so requires a keen eye for minute business details—one of which is labor costs. At times, controlling labor costs can feel like a never-ending hunt for the right percentages and budget. However, there are a few best practices that, if followed, are sure to help you keep labor costs to a minimum, allowing you the time to devote resources and efforts toward growing your business.

Hire—And Keep!—The Right People

Hiring can be one of the most expensive parts of owning a business. That’s because it requires investing both time and money into finding the right candidates and making sure they fully understand their role within your business. Your hiring process is your first—and sometimes your only—chance to show your new employee that you value the time they are willing to sacrifice in order to work for you.

Forging a professional relationship with new employees is one of the easiest ways to control labor costs because it shows them you are willing to learn more about them than just their name or their schedule. Personally investing in your employees gives them a reason to work for you that is outside of their job duties. This will keep your turnover rate to a minimum and allow you to devote time and resources toward growing your business.

Some ways you can reduce turnover is by hiring candidates with a proven track record of being loyal to employers, mixing full-time and part-time employees, and not over-scheduling.

Improve Training

Having well-trained staff can be a huge labor saver. Staff that are well trained are more efficient and management can often schedule a leaner team without sacrificing service. Some training just takes time which is why retaining your staff can be so important and valuable. Other training takes a concerted effort by management. 

For the front-of-house create a clear steps of service that each member is trained on so their is no time-zapping confusion. Daily pre-shift meetings can also effectively and time-sensitively introduce any menu changes or training tips to your entire team. Learning systems can also help reinforce training principles in limited amounts of time which you can learn more about here. 

Back-of-house teams can save time by consolidating the menu where possible. Cross-training your cooks can also be helpful when you want to run with a leaner team on a slow night. 

Be a Community Member

How well do you know your neighborhood? Who lives there? How much do they make? What is the average family size, or is it a young and up-and-coming neighborhood? These are all questions you need to be able to answer as a businessperson, but how do they relate to saving labor costs?

Without knowing this information, you can’t accurately forecast sales or staff your shifts appropriately. Saving labor costs requires you to have knowledge of how many hours you need to use in order to serve your customers and send your employees home happy.

Create a Labor Plan and Stay Accountable to it

Your managers will seldom have the time to create a robust plan ahead of their shift. So, as a restaurant owner, you need to have a labor plan in place that will allow your managers the best chance of succeeding in their day-to-day operations. This includes collaborating and communicating with your management staff about your labor expectations. Using web or cloud-based tools such as HotSchedules and Oracle’s Net Suite will help you communicate these goals effectively. Keeping yourself accountable to your goals increases the likelihood that your employees will follow suit.

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