In any economy, controlling labor can be the key to a profitable week. In the restaurant business, where you’re watching every dollar, the ability to trim labor costs is a survival skill.
We can be certain that at some point, we will face another recession. What cannot be so certain of is when. By doing the work now to prepare, you can set up your business to weather a downturn successfully.
Recession Proofing: labor
Earlier this month, we explored several strategies for recession-proofing your restaurant. One key strategy is efficient labor management. Let’s dive right in with these 5 considerations:
- Labor Dashboard – To trim labor costs, watch dashboard metrics throughout the day, and send staff home during slow times. Set limits on early and late clock-ins to prevent staff trying to cheat the clock. And to make sure your staff are being paid only for the hours worked, enforce a manager override for exceptions.
- Time Clock Accountability – Technology has come a long way and the ability to build accountability and eliminate time clock abuse with biometric ID. A fingerprint scan locks down employee clock-ins/outs, and accurately identifies who is using the POS system, and what they are doing on every transaction.
- Multiple Pay Rates – Set up the POS to track the correct pay rates for the different jobs an employee may work during a shift. For example, a driver may receive one rate of pay while on the road, but another performing other duties in store between runs.
- Online Ordering – At some chains, half of all sales come from web and mobile channels. How much more business could you handle by shifting more phone orders online? Do you have the systems in place to make that happen?
- Targets and Controls – Daily and weekly labor targets are KPIs in many management incentive systems. But to improve labor performance, you often need a more granular view. Break down your sales forecast by day part. Compare the projected delivery sales versus carryout or dine-in or even catering:
- Note differences by hour. Are there other factors this week that could change the forecast?
- Look at events, weather, road construction, and big pre-orders that could have an impact, and then adjust.
- Be accurate with your forecast: it’s the basis for the week’s labor targets.
Posted on Wed, Nov 16, 2016 @ 13:11 PM.
Updated on April 15, 2019 @ 9:44 PM PST.
Posted by Jennifer Wiebe
An occasional contributor to On Point, Jennifer led the marketing team at SpeedLine from 2002 to 2018. She loves books, yoga, playing at the beach, and commenting on bad TV with her family.| Author's website