Are you tired of laboring over your restaurant’s labor costs? Laws surrounding your workforce are tricky; rules vary from state to state and sometimes even across city lines, theyre reliant on federal guidelines, change depending on your tipping structure and affect every aspect of your business despite the mercurial nature of all these factors combined. Labor costs are a significant chunk of your monthly expenses, too, so learning to navigate labor laws will help you exercise control over a big portion of cash outflow.
Rising labor costs are inevitable. The minimum wage is constantly increasing and labor costs naturally rise with it since you have to spend more on your employees; however you can use pay as an advantage to incentivize better people to join your team in the first place. Better-trained, higher-quality candidates will apply to jobs with higher salaries. Full-time employees typically seek jobs that offer health insurance and other benefits, and restaurants’ general failure to provide that kind of stability is part of the reason that employee turnover is so high throughout the industry. Well-paid staff are happy staff, and happy staff work harder and stick around longer.
Pay attention to overtime, as that’s another huge chunk of labor cost right there. Know which employees are nonexempt, part-time and how many hours each person can work. Keeping track of employee hours lets you prevent people from going into overtime and unnecessarily costing you money. Overtime increases when the minimum wage does, so reducing it cuts out a big expense.
Scheduling also has a huge impact on your employees’ mental health. Generally, the food service industry has a bad reputation for swiftly-changing schedules, unexpected overtime and shifts cut short. Sticking to a promised schedule adds stability to employees’ lives and makes it easier for them to establish an acceptable work-life balance that fosters better mental health. If possible, make steady schedules too so the employees can plan their personal lives ahead of time.
You can reduce your labor costs by properly training everyone brought on board. Cross-training your staff not only gives them a chance to round out their industry skills and become better-fitted for a future career, but this investment in them also pays off because your servers can act as runners, bussers and hostsso you dont need to hire those roles. Flexibility on their end equals better preparation for their career and fewer labor costs for you.
Join relevant organizations to stay informed, build a network of other restaurants that inform you about ever-changing labor laws, create opportunities to share ideas and stories, and make friends in the area. Between allies and a strong team, you can create a stronger organization.
You can reduce turnover rates by treating your employees with respect and demonstrating your investment in them, so they in turn want to give you their full commitment. Managing your labor force isn’t always about cutting costs but is sometimes just treating employees as equals. These simple steps will go a very long way toward reducing your expensesand improving your operations and bottom line, too.
