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Controlling-Labor-Costs

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Controlling-Labor-Costs

  1. 1. CONTROLLING RESTAURANT LABOR COSTS Learn how to cut costs, while improving service The complete guide to A PUBLICATION OF BIZIMPLY.COM
  2. 2. Staff Scheduling Time & Attendance Shift Management Work Ergonomics Staff Hiring & more... Bizimply Timestation App for iPad THIS eBOOK COVERS WORKFORCE MANAGEMENT IN THE CLOUD Bizimply brings your whole workforce management world together in one powerful integrated solution. SHARE ME www.bizimply.com
  3. 3. 3 In this 2014 edition you will learn tips and tricks to help you better manage your labor costs Whether you manage 1 or 100 locations, this eBook can serve as your essential guide to better managing your labor costs, step by step. SHARE ME www.bizimply.com CONTENTS Staff Scheduling p.05 Time & Attendance p.08 Shift Management p.10 Work Ergonomics p.13 The Menu p.15 Staff Training p.17 Hiring Staff p.19 Reducing Staff Turnover p.20
  4. 4. OVER 10% OF A MANAGERS TIME CAN BE SPENT MANAGING THE SCHEDULE SHARE ME www.bizimply.com
  5. 5. 5 The Schedule Okay lets get started. Always remember – control your labor costs through better scheduling, not lower wages. New week, New schedule Every week is different and your schedule should reflect this. Don’t just recycle last weeks schedule. Ensure you have checked the availability of your staff for the coming week. Check last weeks schedule to see where you may have been overstaffed and look ahead to any large events that may be planned. Don’t leave yourself struggling to cover shifts at the last minute. Cost & build Costing as you build allows you to really see where you can save. If you wait until the end then it becomes a mad dash to cut hours and stay on budget, which always leads to inefficient schedules. Set clear targets   Without clear targets there is no way to ensure a steady labor cost. Work out what your current target labor cost is based on this weeks schedule and see if you can reduce it by 5% for next week. Monitor targets Target sales per labor hour (SPLH) is a great key performance indicator (KPI) to track for your business. If you have target sales of $2000 and target hours of 40 then your SPLH is $50. Try and maintain a steady SPLH throughout the week and don’t let it fluctuate with sales patterns. This will also ensure you have adequate staff cover for each day. Arriving together?   Do all your staff arrive at the same time for each scheduled shift? Do you need all your staff to be in at the same time? Most shifts require a bit of prep work which usually only takes one or two people. If you adjust your shifts to start in 15 or 30 minute increments then your staff will arrive as you need them. SHARE ME www.bizimply.com 9/10 Salaried restaurant employees started as hourly workers
  6. 6. 6 Are labor patterns reflecting sales? When your sales increase your labor cost may increase but when sales decrease do your labor costs decrease? In order to achieve a reduction in costs you have to schedule accordingly and anticipate periods of low sales as well as high sales. Low service levels and too many staff? Remember sometimes service levels can be affected by having too many staff. Too many staff can often be worse than too few staff. Remember the old saying “the devil makes work for idle hands”. End of week comparisons? Before launching head first into another busy week, it is important to reflect on what happened last week. Try comparing scheduled labor costs against actual labor costs at the end of every week. You will quickly see if changes are needed. SHARE ME www.bizimply.com
  7. 7. 13.5 million people work in US restaurants SHARE ME www.bizimply.com
  8. 8. 8SHARE ME www.bizimply.com Time & Attendance Most labor savings can be made at the start and end of each shift. Have you got any buddy punchers? Buddy punching is when an employee has a co-worker punch them in early or punch them out after they leave. It is a common practice that is extremely hard to detect. A common deterrent for buddy punching is a clock in machine with a fingerprint scanner. These however are notoriously slow, easily broken in a fast paced environment and can actually result in employees being late for work. We experienced this in our restaurant and replaced them with our own iPad clock in app called Timestation. This allows a quick picture to be snapped each time someone clocks in or out, a simple and effective solution. Obviously there are other great apps out there so find one that suits your business, but know that eliminating buddy punching can dramatically reduce labor costs. Are you comparing actual against scheduled times at the end of every shift/day?   Is there a pattern emerging with staff leaving later on certain days regardless of how busy you are. It is important to emphasise to your managers that they need to stick to the schedule and ensure their teams finish on time. Try to ensure that staff only sign in when in uniform and sign out before changing. Set clear times for actual breaks Your staff should know when their break is and how long they are entitled to take. Allowing your staff to take breaks “when we’re quiet” leads to longer breaks as there is no pressure to get back to work. Also for staff who smoke, this should only be done on their actual break. Do not offer “Smoke Breaks” to staff.
  9. 9. 4% of U.S. GDP is created by the restaurant industry SHARE ME www.bizimply.com
  10. 10. 10SHARE ME www.bizimply.com Shift Management Before, during and after service there are some practical things to do. Pre & post service team briefing A quick meeting before and after every shift gives you an opportunity to teach and listen. You can also take the opportunity to share targets with your employees at these shift meetings.   All hands on deck Are all hands on deck at your busiest times. There should never be anyone taking their break or working in the office in the middle of service.   Ask yourself, are all your staff fully utilized – at all times? If not what prep work could people be doing.   Work smarter Don’t just assume that your staff don’t have the time to do the job. Sometimes it is just a case of working smarter. Often the time it takes to do a job is directly related to the time you have available to do the job. Think about what every job your staff members are doing. Are there more efficient ways of doing the same job? How many employees does it take to change a light-bulb?   Watch out for tell tale signs of too many staff – For example two people to clean a fridge. Write a clear job description for each employee. A job description is a detailed definition of a job and a list of the specific tasks and duties the employee is responsible for daily, weekly and monthly. The more complete the job description, the simpler the task of training. Remember, staff with a confirmed list of duties will be less inclined to “fill time.” Sample job descriptions may be available from your HR department. You could also get started with a quick Google search.   Spot patterns Insure that there is an absenteeism policy and take proactive steps when employees are absent. Try to keep an absenteeism chart in their office, to easily monitor patterns.
  11. 11. 11 You’re no angel... As a manager you must examine your own work practices too. Do you come to work grouchy? Do you have sloppy or careless work habits? Is your appearance unprofessional? It is essential that you obey your own standards and rules and do not avoid addressing problems when they arise. Are you showing respect? Mutual respect plays and enormous role in good leadership. Share your goals with your employees, remember lead by example. SHARE ME www.bizimply.com
  12. 12. 7 out of 10 U.S. restaurants are single unit operations SHARE ME www.bizimply.com
  13. 13. 13SHARE ME www.bizimply.com Ergonomics Simple changes can increase productivity and reduce waste. Eliminate clutter A place for everything and everything in its place – staff will not have to waste time looking for anything.   Easy access Can you rearrange work areas. The fewer steps that people have to take, the faster they can do the job. Create mini work stations where all necessary food, utensils and prep spaces are close at hand.   Workstations Break the kitchen activities into self-contained workstations where ingredients, tools, equipment and supplies are within easy reach. This will eliminate excessive bending, lifting and reaching. Its also important to remember your left-handed employees when setting up workstations. Problem equipment Check that there are no equipment problems that are affecting labor. Ensure knives are sharp, and train your staff how to use them. Clever Storage Increase productivity by having 3 types of storage. Active, back up and long- term. Active storage is accessed repeatedly throughout the day and should be near the work station. Back up is used to refill bulk items and long term should be out of reach and locked away.
  14. 14. One-half of all adults have worked in the restaurant industry SHARE ME www.bizimply.com
  15. 15. 15SHARE ME www.bizimply.com The Menu Where in the menu can we save time? Hidden labor Do we need to change the menu, is it too labor intensive or are there too many offerings? Always ask, are you selling enough of a specific item to warrant the labor required to prep, prepare and serve it. Self serve options Explore labor saving ideas of self service restaurants – buffets, tea/coffee machines etc. Could you make this work for your business, perhaps with a unique twist? Are the dishes causing problems? Always check how many dishes are returned after each service. Know the reasons why each was returned and how much it cost to comp or replace meals. More often than not it is the same one or two dishes that are causing problems for your customers and obviously your chefs. While the problem may lie with the cook, you may also reduce wasted labor and food costs by making some small changes to the dishes or removing them from the menu entirely. Better prep work Can you do more prep in advance and perhaps batch cook some dishes? This will allow the chef to serve and observe portion control etc. You may look at sous-vide cooking as a labor saving option for your food prep. BIZIMPLY The Breakfast Menu Wheat cakes with maple syrup or honey Prep 10 mins | Cook 10 mins Classic eggs Florentine Prep 10 mins | Cook 10 mins Roasted kabocha squash toast, fresh ricotta and apple cider vinegar Prep 30 mins | Cook 10 mins Scrambled eggs on toast Prep 5 mins | Cook 5 mins
  16. 16. 72% of consumers are more likely to visit a restaurant offering healthy options SHARE ME www.bizimply.com
  17. 17. 17SHARE ME www.bizimply.com Staff Training You won’t do it better if you don’t know how to do it right. It’s quicker when you know what you’re doing Do you invest in training? Ensure that the staff are trained in the jobs they are doing. Allocate time to properly train your employee. Regularly review your current employee training needs.   Who’s the trainer? Maybe you could appoint a trainer in your unit. Untrained employees will cost you more in low productivity, poor service, waste and inefficiency.   A flexible workforce Cross training staff and multi skilling. Teach your employees how to do jobs other that their own regular jobs. Employees can be moved around and fill in while other staff are absent. Supervisors could serve or do cash. Chefs could man the counters if required.   A smarter workforce Lack of training can lead to employees having poor attitudes to various aspects of the business and will most definitely lead to many staff developing poor work habits. Proper training will lead to greater employee productivity. It’s your job to teach them how to work smarter, not harder.
  18. 18. 1.3M new positions are projected to be added by U.S. restaurants in the next decade! SHARE ME www.bizimply.com
  19. 19. 19SHARE ME www.bizimply.com Staff Hiring Hire once, hire right, retain. Look for more Remember your business success is based upon your success at gathering together a group of workers with different skills and experiences to produce a quality product.   Search for the right person to fill the job. Look beyond the basic skills for a person who will be the face of the restaurant and will work well with your team. Hire on tasks, not on talk   Before you hire an employee – Keep in mind the tasks the employee must accomplish. Is this person suited to talking to important customers all day or doing a lot of back office tasks?   Remember the cost of employing a worker is far greater than his or her net pay, regardless of the worker being salaried or hourly.   It is never the right time to hire the wrong person Resist the temptation to “panic hire.” Don’t in desperation, hire the first person you interview. Hold out for the right person.   Your current team has great potential! Try to promote from within your own business. Develop a succession plan for your business if you have not done so already. ASK YOURSELF What % of your budget comes from agency workers? What % of your budget comes from overtime? What is your labor/sales ratio for every day... better still by the hour?   Instead of looking to employment agencies, ask your employees first if they can recommend anyone.
  20. 20. 20SHARE ME www.bizimply.com Cut Staff Turnover Hire once, hire right, retain. High staff turnover costs more than money! High turnover of staff is very costly to the business. Re-staffing and training costs your business in productivity but also has a huge impact on customer relations. Any relationships fostered between your staff and your customers will be hard to recover, should that team member leave. Other costs include lost uniforms and obviously the time spent hiring in the first place.   Know why they leave so you can improve Remember exit interviews are valuable information gathering opportunities. Make sure that you get a chance to spend a few minutes with any staff member leaving before they move on. This will be your only opportunity to hear their honest opinion of their time with you and your team. Don’t throw money at the problem  While offering greater benefits and pay rises will undoubtedly attract more potential employees and help to retain existing employees, this will not solve the underlying reasons for a high staff turnover. On a daily basis there are simple things you can do to ensure the workplace is a supportive and enjoyable environment. Hardworking team members should be praised for their work in front of their peers. This helps to show others that you respond well to a job well done. After busy weeks or great team efforts small gestures like a gift cards or movie passes can be great to let your team know their efforts are not going unnoticed.
  21. 21. Start controlling your costs today Just click and sign up. Simple. THIS IS A PUBLICATION OF BIZIMPLY.COM All stated facts are courtesy of The National Restaurant Association. See more on restaurant.org POWERFUL SCHEDULING | iPAD TIME & ATTENDANCE | MULTI LOCATION

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