Without your servers, cooks, hosts, and more, your restaurant would be nothing more than a grocery store with tables. Restaurateurs know better than most business owners how critical it is to find great staff since they all have a direct impact on customer experience.


Once you have a great staff in place, managing labor costs is also critically important. Unlike food, you can’t freeze your staff to use them at a later time.


Here’s three changes to start making in your restaurant today to control labor costs and increase profit.


  1. Strategically Schedule


It can be tricky to strike the balance of just the right amount of staff on any given day of the week. Too few cooks and servers and the quality of your product and service go down. Too much staff and your employees may find themselves distracted by talking with one another and not attending to customers.


Try scheduling your team to a level where they could use one more person on the floor. Why? It keeps your team focused on the customer and providing the best service possible.


  1. Calculate Labor Cost Daily


Tracking your labor cost isn’t as difficult as preparing the perfect soufflé. If you have a POS system in place, simply run a report at the end of each day to see how much you paid hourly employees that day and divide by gross sales.


(Total Wages/Gross Sales)    x    100    =    %  Labor Cost


As the days go by, calculate this formula based on running totals, and schedule the amount of staff needed to hit your %  Labor Cost goal (somewhere between 20-25%).  Eventually, management will have a different labor target to shoot for every day of the week to stay on track.


  1. Forecast Sales, then Schedule


Forecasting sales allows you to schedule staff based on more than just a gut feeling. Start by making your best estimate of what you think your Monday–Sunday gross sales are going to be by the 20th of the current month for the next month.  Multiple that number by your % Labor Cost target (see above) and you now have a clear idea of how much staff to schedule — rather than scheduling like you always do and crossing your fingers you’ll be able to pay them.


By carefully managing your labor costs, you’ll be taking care of one important piece of the pie when it comes to your restaurant’s success.