Labor is one of the biggest controllable expense a food and beverage operation business will incur. It is an area you should manage well or it could run the business profit margins in to the ground. When labor is cut too thin it will also adversely effect your business operations. Let’s cover some items that happen when cutting labor too much results in loosing profits for your business.
Depending on your industry your labor goal percentages can vary. If you are a full service or quick service restaurant your want to be in the 25% range, but a convenience store would be closer to 15%. It’s a balancing act to manage your labor and food cost. Lower food cost results in higher labor and in reverse higher food cost results in lower labor. You never want both when combined to be over 60% costs.
There has to be key people in set positions to execute properly for your customers.
I have seen it multiple times. Owners over commit staff to perform too many job tasks. While this looks good on paper for labor expense, you have now caused the customer to have a poor experience with your location. When someone has a substandard service and food how many more times do you think they will return? Few if any. This creates a downward spiral for the business. This will shrink your profit margin. It’s a pin hole in a cup slowly leaking till nothing is left.
Owners will say “I don’t have enough sales to justify scheduling one more person.” The result is your customers have poor service and start to come back less and less. Over time this means less sales for your food service program. I don’t suggest over staffing but find a balance that fits with the goal of growing food sales in mind.
Sometimes you have to staff to sell, and can’t sell to staff.
If you are starting a brand new food program or opening a restaurant be prepared to invest more labor than needed for the first couple months. It is top priority that all of your initial customers coming in have the best possible service and food. This builds up your regular customer based who will start to visit frequently.
You have to pay the price upfront. Much like how you invest in equipment for the kitchen, you have to invest in training and proper staffing. I always suggest to hire twice what you need when opening a new store. You will find your top players and can sort through the beginning roster of team members. I hate to say it but expect half of the staff to not make the cut or they themselves will stop showing up to work. I have seen this a happen to many times not to suggest this.
You have trainers at your store for multiple days but then only schedule 1 or 2 team members to learn ow to execute. Then those team members leave or don’t end up working out. Now who is left at your store that is trained? No one. You want to have more than a handful of staff to learn when trainers are at your store. Take advantage of trainers being on site pouring information into your hospitality operations team. This will help you achieve operational excellence and increased profit margins.
If you are a current location selling food but decides to cut labor so much your team is now doing multiple jobs, your customers are suffering. For example: having one team member to ring people up, take customer order and make the food. Sure if one customer comes in this is fine. What happens when your team member is cooking someones order, but then a different customer is ready for checkout and a third customer now wants to place an order? Which customer gets the short end of the stick in this scenario? The answer is they all do.
If a customers food is cooking, but the staff has to walk away to help other customers this can cause the order to be over cooked. Then you wonder does your team member serve the first customer a sub par product or do they remake the order but this causes double the wait time for their food to arrive.
If you want to sell food be prepared to have enough staff to operate effectively.
You won’t need everyone to arrive for work at the same time and leave at the same time. Stagger your team in and out. Have your openers get the kitchen up and running. Next have your peak sales crew arrive before the shift fully hits to ensure great service in the known busy times. This is often 11AM to 2PM for lunch and 5PM to PM for Dinner Mon to Friday. Saturdays and Sundays tend to be and hour later. You would cut your openers after the rush ends and have the peak crew stay later to finish clean up and prep for the next shift.
Having IN and OUT duties for the position (not the person) makes a great flow. Each shift always sets up for the next. First ones in to work get the stations ready, late arrival team members prep for the following rush. Have each of your staff clean as they go and before they leave so no one ever walks in to a dirty work station.
These are some general notes to help improve your food program labor goals. Hospitality can be challenging getting it up and running, but it is highly rewarding once you have the moment and standards in place. Don’t cut your labor out so much it effects your customer service standards and food quality.
Nothing beats a great Friday night shift that runs so smooth it doesn’t even feel like work.
I hope you found this post helpful. My mission is to make operations easy to understand. It would be a huge blessing to me if you would take a moment to share this post on your social media sites. If you have any questions or comments please don’t hesitate to share them below. I look forward to hearing from you.
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