How to Run a Restaurant without Routine Overtime
Are your labor costs spiraling out of control and eating into your profits? Do you feel overwhelmed trying to keep these expenses in check? You're not alone, and I'm here to help. Welcome to the sixth video in our special seven-part series, where we tackle labor cost challenges head-on and give you the tools to regain control. Each video in this series covers a crucial step to help you manage and reduce your labor costs effectively, whether it’s auditing timekeeping, cutting down on unnecessary overtime, or optimizing your schedule. Today, I’m talking about a major labor killer: overtime.
Do you have routine overtime on your payroll every week? Are you short-staffed in your kitchen, causing the same cooks to rack up overtime week after week? Are your supervisors working overtime because they’re undermanaged and taking on additional tasks? Remember, overtime is paid at time and a half. This means if you were staffed properly and still needed those extra hours, that half-time pay would be money saved.
Tips to control overtime:
- Staff for your sales: Schedule based on your weekly sales, not daily. Consider production needs, especially after busy weekends. Your slowest sales day might require more prep work, like Mondays. Manage labor costs for the week, not just daily.
- Approve schedule changes: Whether you use a paper system or scheduling software, ensure all schedule changes are approved by a manager. Scheduling software makes this easier by requiring managerial approval.
- Know your employees: You have different types of employees – those who want to go home early and those who seek every possible shift. Balance their availability with your staffing needs to avoid burnout and maintain efficiency.
- Avoid overtime unless necessary: Sometimes, overtime is unavoidable, such as during special events. For example, if you have a sports bar near a major event like the Masters in Augusta, Georgia, you’ll need extra staff. In such cases, higher labor costs are justified by the increased revenue.
Remember, overtime is time and a half, and that half-time pay is an unnecessary expense when proper staffing can prevent it.
Be sure to visit my YouTube channel for more helpful restaurant management video tips.
