Seven Technologies, Tips and Tricks for Reducing Restaurant Labor Costs

Labor costs are the single largest expense category for many restaurants, according to Bizfluent. In fact, as much as 35 percent of gross sales goes to paying both wage-earning and salaried workers. Managing these costs can be tricky: Overstaff when business is slow and you end up wasting money on idle workers, but understaff during peak hours and you risk alienating diners with poor service and food that falls short of their expectations.

The good news? Restaurants aren’t completely at the mercy of high labor costs. Rather, the following seven tips can help restaurants optimize labor costs toward a better diner experience and bottom line.

1. Commit to staff training.

Simply put: A well-trained staff can do more with less. If your goal is to maximize the productivity of your staff, implement a training program covering both onboarding and ongoing issues.

Furthermore, cross-train front-of-house and back-of-house employees to understand and perform a variety of tasks — this allows them to best support each other and to jump into other roles, if necessary.

2. Minimize staff turnover.

High turnover rates are expensive. Control attrition by seeking out quality candidates, offering flexible scheduling, hiring the right balance of part-time and full-time employees, and avoiding demoralizing overstaffing.

Other restaurant retention strategies include conducting staff reviews and rewarding team members who consistently deliver.

3. Outfit your kitchen with the best equipment that you can afford.

While the cost of high-quality restaurant equipment may seem tough to swallow, it’s ultimately an investment in employee efficiency, productivity and satisfaction. Thanks to technological innovations, the latest restaurant equipment is designed to simplify, streamline and accelerate kitchen operations. So while you may end up spending more upfront, you’ll enjoy a faster ROI.

4. Review your kitchen layout, floor chart and processes.

Because running a restaurant is a dynamic enterprise, what worked best for you yesterday may not work best for you today. By routinely reviewing your kitchen layout, floor chart and prep and serve processes, you can identify productivity killers and time-wasting redundancies in order to make constructive modifications. For example, if your servers are spending too much time running back and forth to the bar, adding a centrally located service well can be a timesaver.

5. Prioritize restaurant safety.

Your employees aren’t just employees; they’re also valuable assets. When you provide them with the safest work environment possible, you not only reduce the chance of accidents, time off, workers compensation claims and related turnover, but you also show them that their health, wellness and happiness matter to you.

6. Schedule smarter.

Keeping track of slow times and busy times can help you schedule your staff most efficiently. Looking to the past is one of the easiest ways to forecast future sales throughout the year. Customizing your schedule for specific events and incorporating on-call shifts are also tactics that support efficiency.

Lastly, use mobile scheduling and “online talent management systems” to make it simple for your staff to pick up and trade shifts on the fly.

7. Assess your menu.

A large menu may be pleasing to diners but only if the items are successfully executed. Certain menu items, such as fresh pasta and crepes, are more labor-intensive than others. While some may pay for themselves because of diner demand, others may strain your back-of-house. Take a closer look at your menu to determine any items that don’t make sense from an ROI perspective.

Achieving ideal labor costs is a balancing act for today’s restaurants. By utilizing these seven tips, restaurant owners and managers can keep labor costs under control without sacrificing diner satisfaction.

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