As a leader you can greatly impact the store's profitability by properly managing labor costs. It demands a lot of our attention and focus, as it’s our second highest store expense.
Productivity is what we look at to make sure that we are keeping labor cost down. Our Productivity numbers are located on the labor report.
Productivity should be at $59.00 or higher every day. This is controlled by only having the correct number of employees for our sales volume.
Controlling Labor: Send team members on breaks or home if productivity is too low. Start with the least productive team members. Leaders are our top performers. They should have priority with hours. The more high performers we have on a shift, the more productive and effective we are.
a. When Productivity is too Low:
1. We have the right to send Team Members home within business needs.
2. Be tactful and polite but be confident in sending a team member home.
3. Be aware of the total hours that the team members will be working and how it will affect other day parts.
Consider the effects of Overtime:
a. Use only if it adds productivity.
b. Consider the amount of time the team member has worked without a break. If they are working past 4 or 5 hours, (depending on break policy) DO NOT ask them to stay longer without taking a 20 min. or 30 min. break.
c. Communicate restaurant needs to the scheduling director.
Like food cost, control the cost of labor is always a balancing act between profitability and guest experience. Spend too much and the financial health of the business suffers, spend too little and customer experience will take a negative hit. To control the cost of labor effectively, leaders need to know their team, the trends of the business, and the service expectations of their customers.
Once you have completed this section, you will be able to:
Calculate labor cost
Identify labor gaps
Track labor throughout the business day
Use this PDF to understand what labor cost is and how it is calculated
Use this infographic to understand how productivity is calculated. To find this information on the POS registers:
Login to Store Mgmt
Select "Site Reports"
Select "Labor Report"
Seleect the business date
Select how you want the report split out
Select "Actual Wage"
Print the report
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