Labour is one of the highest restaurant expenses, accounting for between 25 and 35 per cent of total operating costs, and it is a challenge to manage these costs (among everything else) for many of today’s restaurateurs. From hiring to training, scheduling, and retention, managing labour costs is a challenging endeavour for many operators.

However, there are some steps operators can take to simplify the labour management process for more efficient, cost-effective restaurant operations.

Analyze your operations

If you don’t know what you are spending on labour, where and when staff are best allocated, and where opportunities lie, how can you be expected to optimize operations? Start by assessing your business to get the information you need to make informed decisions. To determine what percentage of your costs are labour, divide your total labour costs by your total sales, and multiply that by 100.

Adopt technology

Once you have an accurate assessment of your labour costs, consider investing in the technology to help you refine your spending, scheduling, and operations. While this may require an initial investment, today’s technology can help analyze traffic patterns, predict upcoming expenses, simplify scheduling, and optimize labour allocation.

Improve hiring and retention

Research shows that the current turnover rate in restaurants is about 75 per cent, replacing an employee costs about $2,300, and training a new employee is an expense of about $821. Turnover is expensive, so work on simplifying your hiring process and focusing on retention to lower those costs and instability in your business. Determine your staffing needs, refine your hiring process, and seek out candidates who will add value to your restaurant. Practice thorough onboarding and training, as well as teambuilding and positive company culture, to help improve long-term retention.

Focus on training

Tightening up your training can help you better manage your labour. Do you have new or seasonal employees who could be utilized better? Have you cross-trained your teams? These are questions to consider as you work to improve efficiency. Making your staff more flexible by cross-training can improve the guest experience by ensuring smooth operations and minimizing disruptions when short-staffed or during times of high traffic. Additional training can also boost employee morale and increase retention, making employees happier, more confident, and better at their jobs.

Labour is a major concern in today’s foodservice industry, and operators who prioritize labour optimization will provide a better guest experience, see lower costs, and minimize disruption to their business.