1. A Restaurant’s 2nd Highest Cost of Sales
Labor Controls
A Restaurant’s 2nd Highest Cost of Sales

2. What is “Labor”?
The total of all costs associated with maintaining a workforce
This includes Payroll
The gross pay received by an employee in exchange for his or her work.
Payroll is only one part of labor expense

3. Other expenses of Labor
FICA Taxes
Unemployment Taxes
Worker’s Compensation
Health Insurance
Pension Plan Payments
Employee Meals
Vacation/Sick Leave
Employee Incentives and Bonuses

4. Payroll Fixed Payroll Variable Payroll
The amount an operation pays in Salaried Employees (Receives the same income per week or month regardless of the number of hours worked.)
Variable Payroll
Those dollars paid to hourly employees.
Added in relation to the number of guests anticipated to be served.
Management has nearly 100% control over variable labor expense.

5. Steps to Controlling Labor
Know your peak periods of business
Place your best employees where they will be most productive
Watch time in’s and time outs
Cross-train your staff
Monitor labor costs hourly
Communication with FOH

6. Scheduling Payroll 4 Steps to managing Payroll Costs
Determine Productivity Standards
Forecast Sales Volume
Schedule employees using productivity standards and forecasted sales volume
Analyze results by comparing the actual costs to the budgeted cost

7. Forecasting sales volume…
What you need to know:
PPA
# of chairs & table turns
Hours of operation (shifts)
Days open for business
Bar?
Example:

8. Productivity Standards
A productivity standard is
management’s view of what constitutes an
appropriate productivity ratio.
For Example, a productivity of 100 means that for every hour worked for each employee, $100 in revenue is generated
The Productivity Standard helps you figure out how many hours you have to schedule

9. Scheduling Calculate the number of hours available to schedule
Budgeted Sales / Productivity goal = # of hours available to schedule
Ex. $56,000 / 70 = 800 hrs

10. Scheduling
Next, divide the hours available into the days you are open for business.
Use more hours on busier days
Write your schedule, not exceeding the number of hours allotted
Insure you have enough labor to properly care for the guest.

11. Average Workforce FOH Dining Room Manager Host
Waitstaff – 1 per 15 guests
(or tops, staggered)
Bartender – 1 per 30 guests
Busser

12. Average Workforce BOH Executive/Head Chef Sous Chef/Assistant
Grill Cook
Saute Cook
Fry Cook
Salad/Prep
Dishwasher

13. Averages Cooks - $7.25 to $15.00 Dishwashers - $7.25 to $9.00
Waitstaff - $2.13 +
Trainers - $4.00 +
Hostess - $ tip or $8.00
Bartenders - $5.00 +
Managers - $40k Average
General Managers - $50K+

14. Overtime
Any hours worked past 40 is time and a half

15. Turnover rate Turnover rate
(# of employees separated / # of employees in workforce) = Turnover Rate