Tips to Manage Labour Cost in a Restaurant

Tips to Manage Labour Cost in a Restaurant

Managing labour cost in a restaurant is one of the most difficult and important tasks for an owner, as these factors affect the profitability of the business. Whether you are about to open a restaurant or have been running a place for a few months already, there is no doubt that the process will be expensive.

Every restaurant owner wants to keep the labour cost as low as possible. But, is it really easy to run your restaurant with low labour cost? The answer is yes, there are many ways to control and manage the labour costs of a restaurant. Here we have mentioned some tips which can help you manage the labour cost of your restaurant.

Keep Track of Staff Timing:

Having an effective staff time-keeping is essential for any business as every employee has a different task to do and all of them work under different pay and have alternating shifts. Keeping track of employees is complex in restaurants, but if done in right way, it can help manage costs and increase productivity. It is important to make clocking in and out simple for your staff. Using automated time tracking solutions will allow you to track how many hours one employee has spent in the restaurant.

Hire Less but Smart Candidates:

A restaurant should never hire extra staff. Avoid overstaffing in your restaurant with an excess amount of candidates as this can affect the productivity of a restaurant. A few extra employees per shift may not seem like a major expenditure, but even minimum wage adds up quickly. Hire staffs which are sufficient for your restaurant, but do offer them a good salary.

Improve Staff Training:

A great way to increase employees’ efficiency is training them. Training employees can produce a leaner staff without sacrificing service. When a staff member gets to know, how to do the job well, the restaurant acts like a well-oiled machine, churning out order and satisfying customers easily. Training employees will not only increase overall functionality, but staff members will also be better equipped to jump in and assist employees in other positions.

Allow Self Service in the Restaurant:

A lot of staff members are busy in assisting the customers while some other staff members are there for providing small services to the customers, which is not actually required. Because, many times people visit restaurants for a juice, a drink, snacks and other such small requirements.

Allowing self-service in the restaurant will decrease the labour cost and will help in management also. You can use vending machines in restaurants for offering such small services to the customers. If you’re looking for free vending machines for your restaurants, you can opt for them here at

Prevent Staff Turnover:

The staff turnover of the restaurant industry is usually higher than other businesses. This happens due to the disproportionate number of teenagers working in the restaurants. So a good way to prevent staff turnover of your restaurant is to offer good incentives to your employees such as thoughtful scheduling.

Avoid split shifts or unpredictable scheduling that may prevent employees from achieving work-life balance. Hire both full-time and part-time candidates to ensure that you have a balance of highly reliable employees and easier-to-afford employees who can help with tasks that don’t require as much expertise and commitment.

Smart Restaurant Design:

A good restaurant design is always helpful in boosting staff productivity, because it saves them time, adds convenience, and prevents unnecessary bottlenecks in the workflow. There is always more to a kitchen and dining room design than aesthetics. Better designed kitchen will allow cooks to move around without bumping into each other, meals can be prepared efficiently, and servers can access plated food without complications. You don’t have to renovate the whole restaurant even simple changes can lead to a reduction in the number of staff members per shift without affecting service speed or food quality.

Customize Your Scheduling:

Scheduling is perhaps the most important factor influencing labour costs. Though it might be difficult to minimize staffing costs while also maintaining guest expectations, smart scheduling can lift off pressure from several issues.

If you’re having a specific event or a party at your restaurant then the first thing to do is customizing your staff. Ensure that the staff will be available during the peak times. Scheduling staff for such events shows the management of a restaurant and better the management of staff, the better it will be in labour cost.

Reduce Waste and Theft:

To control food from going bad or being stolen, use ordering, inventory and security techniques for reduction of food. Keep a record of dishes that are returned and get to know the reason for their return. If you find that a particular cook or dish is not being prepared properly then eliminate them both from your restaurant.

People usually buy products in bulk; it can save you money but can lead to spoilage of fresh foods. Try to get the orders in multiple shipments, it will provide you with a better way to keep the food fresh and also helps in saving labour costs.

Efficient Equipment:

A set of right equipment always empower staff, speed cooking times, lower your energy bills, and boost restaurant productivity. From an Owen to deep fryer, the equipment you have for your restaurant should match the needs of your cuisine and menu. Ask your chef’s which equipment is most needed in the kitchen. Try to think through your needs and goals and choose equipment to suit them.

Keeping a balance between managing cost and providing services to customers is difficult, but not impossible. You just have to use the right techniques and methods to manage the labour cost of your restaurant. Follow the above-mentioned steps and you’ll be able to manage the labour cost of your restaurant.

2 thoughts on “Tips to Manage Labour Cost in a Restaurant

  1. Yeah, like the guy above said, this idea is universal. However, though, in regards to hiring, some people need time to develop. Anyway, though, it’s tough to know who will develop and who are just “bad eggs”. Does anyone have any basic idea how to deal with that dilemma?

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