1 Thing You Can Do Today to Track and Control Your Restaurant Labor Cost
If you want to control your labor cost, scheduling on budget is only half the battle. Before you start jumping into more advanced controls like dollars per labor hour worked, the second half of the battle is tracking your labor cost on a daily basis because the phrase, that which you measure improves, is 100 percent correct. In this video, I’m going to share the one thing you can do today to track and control your restaurant labor cost.
Most restaurant managers have been taught to track labor on a daily basis but many of them have been taught to track just the dollars that came in in sales and the dollars you spent to come up with a labor percentage. Some of them have even been taught to do the running total, such as Monday the labor cost is 18, Tuesday’s labor cost is 22 and the running total is 20. The days go on, and as you and your team do this, you start to see where your labor cost is going to be, allowing you to work towards the right target. The truth is it's not all there.
The Google sheet I share with my members, the Restaurant Labor Tracker, tracks a lot of details, probably more details than I can describe right now, from forecasted sales to sales needed to hit your labor target to originally scheduled hours versus actual worked hours, originally scheduled dollars to what was actually used, and running totals and so on. It's a little complex but easy to use. It's just data entry. You can track your sales, and your labor costs by percentage and dollars, and you get a running total, but it doesn't tell the whole picture. What I want you to do is one more thing: I want you to look and start to track your originally scheduled hours with those hours that were actually worked.
When you look at your originally scheduled 85 hours on Monday, but Tuesday morning you come into the restaurant and see they worked 90 hours. Let's say you forecasted $7,000 in sales but worked more hours, so your expectation would be that your sales should be higher than that forecasted $7,000. Instead, when you find it $7,000 or less, it means you have managers who are falling asleep at the wheel. They are not cutting hours properly, not paying attention to the POS system and the needs of the business.
The solution is to train your managers to look at their sales every half-hour to identify time to cut. You need to teach your managers to look at who closed the shift last night if your hours are higher and your sales are lower. What kind of coaching does that manager need in order to start to interpret the numbers on a daily basis and keep you on budget?
When you track, it helps your managers come up with a plan to get back on track. Tracking helps you see that you screwed up your labor cost on Monday, but you no have six more days to fix it without cutting service levels.
The last thing we want to do is get to Friday and freak out and start cutting hours, especially coming up on the two busy sales days of the week.
Teach your managers to track scheduled hours and sales and hold them accountable to the numbers. This will keep your labor cost on track.
Be sure to visit my YouTube channel for more helpful restaurant management video tips.
