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6 Tips for Controlling Labour Costs in the Restaurant Industry
Labour costs are one of the most important costs of running a successful restaurant. How do we determine its effect on business?
 An effective gauge is the labour cost percentage: divide the amount owed for payroll with the amount earned in sales. The goal of any restaurant should be to keep this percentage below twenty percent, as anything more than that is too costly.
Here are six tips to keep that number from approaching anything unreasonable.
1) Cross-Training Staff
Cross-training your staff is an essential tool in combating unhealthy labour costs. By preparing workers to handle other jobs that need filling as necessary, the restaurant is able to better focus on keeping the number of workers needed in a given day low. When the prep cooks are able to operate the grill and the hosts can act as back-up servers, you eliminate the need for a specialized, diverse staff. The beauty of cross-training is that it maintains the same level of production quality your restaurant is known for without bleeding money on unnecessary labour.
2) Regular Audits
While cross-training your staff, it might be a good idea to also perform regular audits on their performance. By observing how each member of your staff operates during a given work-day, you can better assess their time management, as well as how to construct your schedule around certain parts of the day that are "down-times."
3) Hourly Wages
Although restaurants normally operate on fixed wages, extra staff on busy nights should be shifted to hourly wage rates. As simple as it may sound, it will drastically improve the effect labour costs have on payroll when workers are only taking in a variable amount based on how much they're actually needed on those intense work nights.
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