Twenty percent. That is the commonly accepted percentage of labor costs to revenue in the restaurant sector. It is easy math: Revenue ÷ payroll = percent of labor costs to sales For any specific time period. Revenue is the unruly […]
Twenty percent. That is the commonly accepted percentage of labor costs to revenue in the restaurant sector. It is easy math:
Revenue ÷ payroll = percent of labor costs to sales
For any specific time period.
Revenue is the unruly member of this equation. It changes season to season, day to day, hour to hour. Payroll is much more well behaved, a lot more predictable. And it is that part of this calculation we are going to discuss today: managing labour costs.
Labour costs are best controlled when:
- Performance is tracked in profound detail.
- It is based on accurate sales predictions
- Staffing is precisely matched to this prediction.
- Staff understands how–or is educated –to do more than 1 job at a time.
Wait staff performance
Labour costs are controlled when time and attendance, duration of breaks, sales per change, preparation time are tracked and reported. Needless to say, you must instantly spot and terminate non-performers, and identify flaws (such as a reluctance to upsell). And you must take preventive actions also. Consider punch clock functions, for example, like enforcing lockouts to prevent employees from clocking in before beginning of shift.
Accurate forecasting has to be comprehensive, which means moving beyond end-of-day numbers. You must understand sales volume by time of day–that way you have the ideal policy on the floor all of the time rather than the majority of the time. You must understand sales volume by type of foods –that way you do not have the incorrect chefs in the kitchen. You need to understand the sales volume in the pub –that way you do not leave a bartender with little to do but clean clean glasses.
The science and art of scheduling
Controlling costs isn’t nearly how many individuals you schedule at any given moment: it is also about that individuals you schedule. Many restaurants take the simple approach: put their A Team on the ground at exactly the exact same time during peak periods. That is short-sighted though: the only way for newer employees to learn the principles is under stress, with top actors to direct them. The more tactical approach, then, is to get the perfect mix of skills on the ground –a few of the best working alongside newer staff. To some extent the exact same principle applies during slow periods: now some of your promising staff mentors trainees.
The Value of skill sets
The problem expands though; it is not only about performance today, but abilities also. Key to labor management is having employees that could handle more than 1 type of job. When pub sales are slow, schedule servers that can mix drinks or greet and seat.
Skills are not simply about what somebody knows: it is also about what somebody can learn. Once more analysing labour management information, it is simple to spot, for each worker, where present skills need strengthening or new ones can be developed. If a server is always rated high in customer feedback, teach them to deal with the podium. A prep chef ranked”fast to learn” can be taught to manage the grill. As important, you will need to understand –in fact you will need to get alerted–to workers for whom additional training would have little value.
Approaching the magical 20% is performed with information, analysis, monitoring, strategic scheduling and much more. It is about knowing the specifics, and understanding how to use them.
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