Controlling labor costs in a restaurant ranks as one of the top stressors of running an eatery. It’s easy to see why — labor costs are one of the largest expenses a restaurant owner has, second only to inventory. Labor management mistakes can be expensive and lead to employee turnover, and a high turnover rate can really cost you. Here are three tips for reducing turnover and controlling labor costs in a restaurant:
1. Simplify the Onboarding and Training Process
Electronic onboarding reduces the amount of time employees and managers spend filling out and processing paperwork for new hires. And in an industry with a 70 percent employee turnover rate, that time — and the costs associated with it — can take a significant bite out of profits. Instead of assigning hours of work to managers for the onboarding process, have new hires complete federal and state documentation forms and comply with Title VII online.
In addition, an intuitive POS system reduces the amount of training for new staff and ensures more accurate, faster order entry as employees learn their jobs — and reduces the amount of time and resources wasted on remaking orders prepared incorrectly.
No one wants to struggle with outdated equipment that forces them to work harder or longer, no matter what industry they’re employed in. Restaurants are carefully timed work environments, so make sure your staff has the tools they need to be successful and deliver properly prepared meals to the right customers at the right time. Old technology or missing components like a kitchen display system, CRM or tableside ordering and payments can lead to a stressful environment where employees can become burned out and contribute to costly employee turnover.
2. Leverage Automated Scheduling and Reporting Tools
A restaurant POS system can help with controlling labor costs in a restaurant, which will save you money in the long term. Leveraging technology allows you to automate scheduling and track late arrivals, early departures, exceptions, and absences. Using shift reports your system generates, you can see how crowds ebb and flow in the dining room and schedule accordingly so you don’t have idle employees, but you are adequately staffed. Many systems can display a comprehensive snapshot of how many employees are working and what jobs they are performing that day, which helps determine the total restaurant labor costs for each job category. Although controlling labor costs in a restaurant often feels like trial and error, the right tools can remove the guesswork and save money.
3. Identify Top Talent and Nurture Their GrowthGreat workers are hard to find, so identify top talent (and workers with potential) and incentivize them to stay with your company by discussing opportunities for advancement early on. Workers who know they have room to grow will stay motivated, and you’ll have a lower turnover rate. Reward longer-term employees with additional job training, so they have new skills and more earning potential. This also saves resources spent on recruiting and training new candidates for management or supervisor positions. Loyal workers who appreciate new opportunities will also help nurture new hires and encourage them to become long-term employees.
When controlling labor costs in a restaurant, remember to streamline on-boarding and training processes so your employees feel prepared to do their jobs successfully. Set up restaurant employees up for success with up-to-date technology and tools to meet their goals. This will help you create a culture that encourages top talent to become long-term partners in helping your business succeed and allow them to do their jobs most productively, accurately, and cost-effectively.