Running a restaurant involves a number of expenditures. One of those, the cost of labor, takes up a large chunk of your profits. Labor is considered an operational expense that is essentially inevitable when operating almost any type of business, restaurants included. However, there are some techniques that make balancing labor costs easier. The following equation can be used to configure total labor costs:
Typically, quick service restaurants aim for a labor cost below 20% of annual sales. This number varies, depending on the style, size, and services provided by your restaurant. Though the rise of labor costs can be taxing, creating a proactive schedule can reduce the stresses associated with maintaining reasonable labor costs. Rather than lowering employee pay wages, implementing the right schedule can boost employee productivity and morale. Improved worker productivity only benefits you as the restaurant manager and/or owner.
It is important to create and follow a monthly budget. Doing so will allow you to track labor costs as well as to plan employee schedules accordingly. Adjusting work schedules according to projected labor costs reduces the loss of profits to unnecessary work shifts.
Monitoring what times employees clock in and clock out is also crucial in reducing labor costs. Observing which employees regularly clock in late allows you to reprimand them appropriately. Contrarily, knowing which employees clock in early gives managers the opportunity to reduce unnecessary costs.
With the QSROnline Web Scheduler, all of the above can be accomplished. Managers can project sales, reduce labor costs, receive emailed alerts, create online schedules, and much more! Contact us today to learn how our Web Scheduler can benefit your restaurant(s).