How Many Restaurant Employees Do You Really Need?

Restaurant labor costs are one thing. Having the right amount of labor to handle the business walking through the doors is a completely different thing. So how do you determine how many restaurant employees you really need? Stick with me, and I’ll give you two key indicators to use in your restaurant to determine how many restaurant employees you really need.

I want to be extremely transparent here. After watching this video, you will not be able to walk away with the perfect formula for success when determining how many restaurant employees you really need. Why? There are so many variables at play here. For example, style of service, price point, complexity of your menu, whether you have a bar component to your operation, etc. But you can use these two key indicators to use in your restaurant to determine how many restaurant employees you need based on the numbers.

Key indicator #1: down and dirty dollars per labor our work calculation. When I say down and dirty, we're not going to get into a detailed spreadsheet and look at everything by hour. Instead this is a cursory level. Are you being efficient or not? What do you need for this? Get the hours worked by position, such as how many bartender hours, how many cook hours, prep cook hours, dishwasher hours, etc. Then you need total sales by category based on the position you’re trying to check for efficiency. For example, your cooks aren’t producing sales behind the bar, so you only need your food sales to measure against kitchen hours. If you’re a restaurant where the bar is primarily where people drink and not eat, then you’re not going to give the bartenders the efficiencies of the food sales. They only going get bottle beer, draft beer, wine, and liquor against their hours. Based on the position, what do they produce? You’re going to tally up by category those total sales, then take the sales for each one of those categories and divide them by the hours worked. This is going to give me you dollars per labor hour worked.You may find you do $150 in sales per labor hour worked for every man hour behind the line. Then take it one step further. Look at your sales per ticket, divide it into per person, the average per person sales by category, the same way you just did it for the dollars per labor hour worked calculation. If you look at your total ticket, it's $35 per person, but X percent of sales is food. Let's say now you calculate a $25 per person for food. You need that number versus the $35 since a server is going against food and liquor sales, but the kitchen is not.

Now, take your dollars per labor hour worked, that $150, and divide it by the average per person by category. For kitchen that would be the $25. So for every man hour behind the line, they produce $150 in sales divided by $15 equals six. That is six entrees an hour on average. That's basically what we're trying to calculate. And when you look at that number, you're going to determine whether that's a good number or bad number. I will tell you, it is not unusual for me to come in and see that five to 10 entrees per hour. And I would ask you, is that efficient? And you would say no… but… every restaurant opens with no sales, has cooks on the line, closes with no sales and has the hours that are slow and the hours when you are getting crushed where you’re doing 30–40 entrees an hour. It is an average. But if you’re getting numbers like six entrees an hour, you want to aiming for 25 or 30, depending on your concept. You need to know your criteria, how complex your menu is, what the sale prices of your average food item and use all that information to determine if you’re efficient or not.

Key indicator #2: minimum staffing. For each position, you're going to write the absolute minimum number of hours for each day for each position and total it for the week. Create the slimmest schedule, period. Whether you did $1 or up to $10,000 in the day, what is that minimum? One cook on the line, one manager, one server, one cashier, whatever it may be, it's the bare minimum to get through.

You can total up all those hours in the minimum, divide it by eight, and you have the minimum staff you need for a shift.

These two indicators can’t be used alone because while your dollars per labor hour worked show your efficiencies, and you figure out you’re not efficient, is it because you have too many people on the line, or is it that your menu is too complex?

Also, minimum staffing level shows you what you need to execute your current menu at bare bones. But bare minimum doesn’t mean you’re efficient if your menu is too complex and requires too many staff members.

There's a chance you could really have strong sales and you're never going to see minimum staffing levels. But if you need to make a major change to your operation and/or your menu, knowing the minimums is important.

There is also a chance your sales are just way too low and no matter what you do, you're going to be at minimum staffing levels unless you increase your sales. The most important thing to create efficiency is to pay attention to your operation and increase your sales.

You may have a little minimum staffing levels out of season and you've got maximum efficiencies, meaning you have sales galore in season. But you still need to make changes based on the season and it still comes down to your menu and your operation.

The real answer is you have to do the calculations and interpret the data the best of your abilities. It’s my experience that 75 percent of the restaurants I work with find their efficiencies are upside down, and they have to rework their menus. What do you think you will find?

If you would like to learn how to own a restaurant that doesn't depend on you being in it to be successful, sign up for my free video course that teaches you three key principles to running a successful restaurant. If you're ready right now to make some serious changes in your restaurant, you can also book a 60-minute call with me where we talk about your challenges and figure out exactly what is holding you back from having a restaurant that doesn’t depend on you being in it to be successful. 

Be sure to visit my YouTube channel for more helpful restaurant management video tips.