Profit margins are tight in the restaurant industry and reducing labor costs is one way to make your restaurant successful. However, laying off workers and paying minimum wage aren’t necessarily the best long-term solutions. There are other ways to cut corners and make your restaurant more profitable and efficient. Here are the labor cost goals you should prioritize:
Boost employee performance
Utilizing POS software that includes a kitchen display system will allow you to track how well your employees are performing. Simply knowing this should motivate your employees to work harder. By analyzing the KDS data, you’ll know who your best workers are (aka who will keep the lines moving during your busiest shifts). Additionally, you’ll notice whether some of your employees aren’t pulling their weight, and you’ll save money by eliminating these lazy workers sooner than later.
And if you need to hire after this, keep the following in mind…
In 2016, the restaurant turnover rate was 61%. On average, this costs restaurants $150K annually due to recruiting, training, and productivity loss. But you can incentivize workers to stay by creating a positive work environment, and clearly communicating your expectations during the recruiting and interview process so there are no surprises. Hire people who you think are a good fit, and when there is turnover, conduct exit interviews to learn where you can improve.
Free up wait staff
By implementing self-service kiosks and tablet POS systems at the table, customers can place orders and pay on their own terms. This means that wait staff are free to attend to their customers’ needs and create a great dine-in experience, which will help create return customers. You’ll likely need less staff on each shift, meaning your other employees can take care of delivery instead of you having to hire separate drivers. More people served by the same number of workers. What could be better?
Reduce employee theft
You know, employees eating the bread during their shift, having their friends clock in for them, pocketing money from sales… these small things add up. To stop employees from “buddy-punching”, install a fingerprint scanner that requires your employees to actually be at work in order to clock in.
Your restaurant POS software will keep track of sales and inventory, but it doesn’t account for theft. If you notice that profit margins are lower than they should be for the amount you’ve sold, or that there’s less inventory than the POS software reports, you need to have a talk with your staff.
Your employees need to eat and take breaks, so let them – but set clear rules on when this is allowed. Let your staff know that yes, showing up to work late, leaving early, and taking self-imposed breaks all constitute stealing. Some employees truly don’t know. Make them aware, and they’ll be less likely to do it in the future.
These solutions might take a bit of time and investment upfront, but the long-run benefits are worth it. Your restaurant deserves it!