The complete guide to

CONTROLLING
RESTAURANT
LABOR COSTS
Learn how to cut costs, while improving service

A PUBLICATION OF BIZIMPLY.COM

THIS eBOOK COVERS

Staff Scheduling
Time & Attendance
Shift Management
Work Ergonomics
Staff Hiring & more...

Bizimply Timestation
App for iPad

WORKFORCE MANAGEMENT IN THE CLOUD

Bizimply brings your whole workforce management world
together in one powerful integrated solution.

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In this 2014 edition

you will learn tips
and tricks to help
you better manage
your labor costs
Whether you manage 1 or 100 locations, this eBook
can serve as your essential guide to better managing
your labor costs, step by step.

CONTENTS

Staff Scheduling

p.05

The Menu p.15

Time & Attendance

p.08

Staff Training p.17

Shift Management p.10

Hiring Staff p.19

Work Ergonomics p.13

Reducing Staff Turnover

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OVER 10% OF A
MANAGERS TIME
CAN BE SPENT
MANAGING THE
SCHEDULE
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The Schedule
Okay lets get started. Always remember control your
labor costs through better scheduling, not lower wages.

New week,
New schedule

Monitor targets
Target sales per labor hour (SPLH) is a
great key performance indicator (KPI)
to track for your business. If you have
target sales of $2000 and target hours
of 40 then your SPLH is $50. Try and
maintain a steady SPLH throughout
the week and dont let it fluctuate with
sales patterns. This will also ensure you
have adequate staff cover for each day.

Every week is different and your

schedule should reflect this. Dont just
recycle last weeks schedule. Ensure
you have checked the availability of
your staff for the coming week. Check
last weeks schedule to see where you
may have been overstaffed and look
ahead to any large events that may be
planned. Dont leave yourself struggling
to cover shifts at the last minute.

Arriving together?

Do all your staff arrive at the same time

for each scheduled shift? Do you need
all your staff to be in at the same time?
Most shifts require a bit of prep work
which usually only takes one or two
people. If you adjust your shifts to start
in 15 or 30 minute increments then your
staff will arrive as you need them.

Cost & build

Costing as you build allows you to really
see where you can save. If you wait until
the end then it becomes a mad dash
to cut hours and stay on budget, which
always leads to inefficient schedules.

9/10

Set clear targets

Without clear targets there is no way
to ensure a steady labor cost. Work out
what your current target labor cost is
based on this weeks schedule and see if
you can reduce it by 5% for next week.

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Salaried restaurant
employees started
as hourly workers

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Are labor patterns

reflecting sales?
When your sales increase your labor
cost may increase but when sales
decrease do your labor costs decrease?
In order to achieve a reduction in costs
you have to schedule accordingly and
anticipate periods of low sales as well
as high sales.

Low service levels

and too many staff?
Remember sometimes service levels
can be affected by having too many
staff. Too many staff can often be worse
than too few staff. Remember the old
saying the devil makes work for idle
hands.

End of week
comparisons?
Before launching head first into
another busy week, it is important to
reflect on what happened last week.
Try comparing scheduled labor costs
against actual labor costs at the
end of every week. You will
quickly see if changes are
needed.

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13.5 million
people work in
US restaurants

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Time & Attendance

Most labor savings can be made at the start and end of each shift.

Have you got any

buddy punchers?

Are you comparing

actual against
scheduled times
at the end of every
shift/day?

Buddy punching is when an employee

has a co-worker punch them in early
or punch them out after they leave. It
is a common practice that is extremely
hard to detect. A common deterrent for
buddy punching is a clock in machine
with a fingerprint scanner. These
however are notoriously slow, easily
broken in a fast paced environment and
can actually result in employees being
late for work.

Is there a pattern emerging with staff

leaving later on certain days regardless
of how busy you are. It is important
to emphasise to your managers that
they need to stick to the schedule and
ensure their teams finish on time.

We experienced this in our restaurant

and replaced them with our own iPad
clock in app called Timestation. This
allows a quick picture to be snapped
each time someone clocks in or out, a
simple and effective solution.

Try to ensure that staff only sign in

when in uniform and sign out before
changing.

Set clear times

for actual breaks

Obviously there are other great apps

out there so find one that suits your
business, but know that eliminating
buddy punching can dramatically
reduce labor costs.

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Your staff should know when their

break is and how long they are entitled
to take. Allowing your staff to take
breaks when were quiet leads to
longer breaks as there is no pressure
to get back to work. Also for staff who
smoke, this should only be done on
their actual break. Do not offer
Smoke Breaks to staff.

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4% of U.S. GDP
is created by the
restaurant industry

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Shift Management
Before, during and after service there are some practical things to do.

Pre & post service

team briefing

How many
employees does
it take to change
a light-bulb?

A quick meeting before and after

every shift gives you an opportunity to
teach and listen. You can also take the
opportunity to share targets with your
employees at these shift meetings.

Watch out for tell tale signs of too

many staff For example two people
to clean a fridge. Write a clear job
description for each employee. A job
description is a detailed definition of a
job and a list of the specific tasks and
duties the employee is responsible for
daily, weekly and monthly. The more
complete the job description, the
simpler the task of training. Remember,
staff with a confirmed list of duties will
be less inclined to fill time. Sample
job descriptions may be available from
your HR department. You could also get
started with a quick Google search.

All hands on deck

Are all hands on deck at your busiest
times. There should never be anyone
taking their break or working in the
office in the middle of service.

Ask yourself, are all your staff fully

utilized at all times? If not what prep
work could people be doing.

Work smarter

Spot patterns

Dont just assume that your staff dont

have the time to do the job. Sometimes
it is just a case of working smarter.
Often the time it takes to do a job is
directly related to the time you have
available to do the job. Think about
what every job your staff members are
doing. Are there more efficient ways of
doing the same job?

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Insure that there is an absenteeism

policy and take proactive steps when
employees are absent. Try to keep an
absenteeism chart in their office, to
easily monitor patterns.

10

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Youre no angel...
As a manager you must examine
your own work practices too. Do you
come to work grouchy? Do you have
sloppy or careless work habits? Is
your appearance unprofessional?
It is essential that you obey your own
standards and rules and do not avoid
addressing problems when they arise.
Are you showing respect? Mutual
respect plays and enormous role in
good leadership. Share your goals with
your employees, remember lead by
example.

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7 out of 10 U.S.
restaurants are single
unit operations
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Ergonomics
Simple changes can increase productivity and reduce waste.

Eliminate clutter

Clever Storage

A place for everything and everything

in its place staff will not have to waste
time looking for anything.

Increase productivity by having 3 types

of storage. Active, back up and longterm.
Active storage is accessed repeatedly
throughout the day and should be near
the work station.

Easy access
Can you rearrange work areas. The
fewer steps that people have to take,
the faster they can do the job. Create
mini work stations where all necessary
food, utensils and prep spaces are close
at hand.

Back up is used to refill bulk items and

long term should be out of reach and
locked away.

Workstations
Break the kitchen activities into
self-contained workstations where
ingredients, tools, equipment and
supplies are within easy reach. This
will eliminate excessive bending, lifting
and reaching. Its also important to
remember your left-handed employees
when setting up workstations.

Problem equipment
Check that there are no equipment
problems that are affecting labor.
Ensure knives are sharp, and train your
staff how to use them.

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One-half of all adults

have worked in the
restaurant industry
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The Menu
Where in the menu can we save time?

costs by making some small changes to

the dishes or removing them from the
menu entirely.

Hidden labor
Do we need to change the menu, is
it too labor intensive or are there too
many offerings?

Better prep work

Always ask, are you selling enough of

a specific item to warrant the labor
required to prep, prepare and serve it.

Can you do more prep in advance and

perhaps batch cook some dishes? This
will allow the chef to serve and observe
portion control etc.

Self serve options

You may look at sous-vide cooking as

a labor saving option for your food
prep.

Explore labor saving ideas of self

service restaurants buffets, tea/coffee
machines etc. Could you make this
work for your business, perhaps with a
unique twist?

Are the dishes

causing problems?

BIZIMPLY

The Breakfast Menu

Always check how many dishes are

returned after each service. Know
the reasons why each was returned
and how much it cost to comp or
replace meals. More often than not it
is the same one or two dishes that are
causing problems for your customers
and obviously your chefs. While the
problem may lie with the cook, you
may also reduce wasted labor and food

Wheat cakes with maple syrup or honey

Prep 10 mins | Cook 10 mins

Classic eggs Florentine

Prep 10 mins | Cook 10 mins

Roasted kabocha squash toast, fresh ricotta

and apple cider vinegar
Prep 30 mins | Cook 10 mins

Scrambled eggs on toast

Prep 5 mins | Cook 5 mins

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72% of consumers
are more likely to
visit a restaurant
offering healthy
options

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Staff Training
You wont do it better if you dont know how to do it right.

Its quicker when

you know what
youre doing

A smarter workforce
Lack of training can lead to employees
having poor attitudes to various aspects
of the business and will most definitely
lead to many staff developing poor
work habits. Proper training will lead to
greater employee productivity. Its your
job to teach them how to work smarter,
not harder.

Do you invest in training? Ensure that

the staff are trained in the jobs they are
doing. Allocate time to properly train
your employee. Regularly review your
current employee training needs.

Whos the trainer?

Maybe you could appoint a trainer in
your unit. Untrained employees will
cost you more in low productivity, poor
service, waste and inefficiency.

A flexible workforce
Cross training staff and multi skilling.
Teach your employees how to do
jobs other that their own regular jobs.
Employees can be moved around
and fill in while other staff are absent.
Supervisors could serve or do cash.
Chefs could man the counters if
required.

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1.3M new positions

are projected to
be added by U.S.
restaurants in the
next decade!

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Staff Hiring
Hire once, hire right, retain.

Look for more

It is never the right

time to hire the
wrong person

Remember your business success is

based upon your success at gathering
together a group of workers with
different skills and experiences to
produce a quality product.

Search for the right person to fill the

job. Look beyond the basic skills for
a person who will be the face of the
restaurant and will work well with your
team.

Resist the temptation to panic hire.

Dont in desperation, hire the first
person you interview. Hold out for the
right person.

Your current team

has great potential!

Hire on tasks,
not on talk

Try to promote from within your own

business. Develop a succession plan for
your business if you have not done so
already.

Before you hire an employee Keep

in mind the tasks the employee must
accomplish. Is this person suited to
talking to important customers all day
or doing a lot of back office tasks?

Remember the cost of employing a

worker is far greater than his or her
net pay, regardless of the worker being
salaried or hourly.

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ASK YOURSELF

What % of your budget comes from

agency workers?
What % of your budget comes from
overtime?
What is your labor/sales ratio for every
day... better still by the hour?

Instead of looking to employment

agencies, ask your employees first if
they can recommend anyone.

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Cut Staff Turnover

Hire once, hire right, retain.

High staff turnover

costs more than
money!

Dont throw money

at the problem
While offering greater benefits and
pay rises will undoubtedly attract more
potential employees and help to retain
existing employees, this will not solve
the underlying reasons for a high staff
turnover.

High turnover of staff is very costly to

the business. Re-staffing and training
costs your business in productivity but
also has a huge impact on customer
relations. Any relationships fostered
between your staff and your customers
will be hard to recover, should that team
member leave.

On a daily basis there are simple things

you can do to ensure the workplace is a
supportive and enjoyable environment.

Other costs include lost uniforms and

obviously the time spent hiring in the
first place.

Hardworking team members should be

praised for their work in front of their
peers. This helps to show others that
you respond well to a job well done.

Know why they

leave so you can
improve

After busy weeks or great team efforts

small gestures like a gift cards or
movie passes can be great to let your
team know their efforts are not going
unnoticed.

Remember exit interviews are valuable

information gathering opportunities.
Make sure that you get a chance to
spend a few minutes with any staff
member leaving before they move on.
This will be your only opportunity to
hear their honest opinion of their time
with you and your team.

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THIS IS A PUBLICATION OF BIZIMPLY.COM

All stated facts are courtesy of The National Restaurant Association. See more on restaurant.org