Ways to deal with increased cost of labor
Updated: Sep 3, 2020
Labor costs generally account for the greatest percentage of money that’s being spent in order to run your business. That’s why managing labor costs are important when it comes to optimizing these costs and make sure that you are running a tight ship.
Here are some tips for improving the way in which you pay your employees that will hopefully enable you to save money wherever and whenever possible:
Schedule staff based on forecasts and variable analyses
Your ability to schedule effectively is directly proportionate to your ability to analyze labor data and schedule accordingly.It’s important, however, to read data with a critical eye. It’s crucial for restaurant managers to evaluate the extraneous variables that might affect sales trends. Perhaps there was a major sporting event on the same day last year that drove sales through the roof, while today is just another meandering Monday. Or maybe your patio was packed last year, but today typhoon rain is blowing your patio umbrellas away.
For instances when you just can’t be sure, placing service staff on call is a great way to navigate cost variables that can only be determined the day of.
Invest in self-ordering kiosks
Welcome to the future, where machines make your gluten-free eggs with toast and a latte! While we may not be there quite yet, the self-ordering kiosk is saving restaurants on labor costs. By allowing management to supplement counter staff with technology, customers input their orders into intuitive kiosks that deliver their order straight to the kitchen. Lines move faster, which means more sales, less errors, and, of course, less labor costs.
With self-serve terminals, managers can spend less time rejigging schedules, sick days, recurring wages, and overtime – and more time on making money.
Since serving hours are fluid, clock-out times are rarely predetermined. So keeping track of employees’ hours is an activity that should be monitored on the daily. Your reporting system should allow you to craft an hours worked report that includes a breakdown of hours worked by each staff member, the number of shifts they worked, and pay accrued for those hours, all while accounting for different roles .By reviewing your hours worked report daily, you keep a pulse on the changing beat of hours worked and avoid small but costly mistakes.
A host who can run food, clean tables, manage the wait list, and, with some sort of unique brand of customer service magic, lull hangry customers into a placid state should not be undervalued. But at the same time, if she’s the only one who knows how to manage the hosting app, she’ll have to be scheduled at all times, even slow nights.
Cross-training makes sure another employee can pick up the slack. Normally, we think of cross-training as advantageous in situations where your restaurant gets slammed or an employee calls in sick, but really, cross-training reduces your reliance on specific individuals. This saves you labor costs because you’re not dependent on one person to do one job. For example, if your customer turnover is manageable Sunday through Wednesday, you might train all wait staff on how to use the host management app and perform hosting duties like taking and confirming reservations. This way they can manage the host stand and tables in tandem on low-volume evenings, and you can reserve hosting staff for busy nights. When it comes to labor costs, management should take the long view.
The solution for managing your labor costs better is simple– better management. And guess what? Dini can help you in just about every facet of this problem.
It helps you make better, more intuitive schedules, it allows you to track employee time and attendance data, and it enables you to contrast and compare your business data to forecast better budgets and schedules, ultimately helping you to save on labor costs across the board.
At ekaart, we designed Dini– the voice-based Restaurant Operating System. Dini apps help automate restaurant operations and capture data in real-time. This results in improved quality and operational excellence for the restaurant. Restaurants also benefit indirectly from better customer experiences and reduced marketing spends.
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