5 Simple & Effective Ways to Control Labor Costs in your Restaurant or Cafe
- November 9, 2020
- Posted by: Morgan Ayres
- Category: Cafe, Grocery, Restaurant, Retail
5 Simple & Effective Ways to Control your Cafe or Restaurant Labor Costs!
As minimum wage increases across Canada and Covid impacts hospitality with decreased customers visiting, you must find ways to save on costs. Finding the right balance of cutting labor costs, without impacting customer service is an art. Here are proven and effective ways to control labor costs without sacrificing service:
Making the wrong hire can be costly. The investment in onboarding and training an employee, only to see them leave after a few months can be costly. Properly vet your potential new employees by 1) Completing a thorough and detailed interview 2) Asking the right questions (ie. What length of employment will work best for you?) and 3) ALWAYS performing background and reference checks!
Proper training improves efficiency, which means you can have a leaner workforce without sacrificing customer service. So, train new hires consistently and properly. Show them your vision and customer service standards. Give them time to learn the computer system before interacting directly with customers. Set clear expectations, and let them have time shadowing your best employees. Create an employee handbook that will set guidelines for conduct and being the best team member possible.
Improve Employee Retention
The high-turnover rates are well-documented in the restaurant industry, with these rates sometimes over 80%. Having low retention and having to replace employees seasonally will eat away at your profits very quickly. New employees cost more and make more mistakes than seasoned and tenured team members. As well, training new hires is an investment of time, resources, and money.
Expert Tip to prevent high turnover rates:
Reward & recognize employees doing their work right! Call them out for their hard work, for going above and beyond and for achieving targets
Provide growth opportunities and a clear path to advance skill sets and or grow within the company
Audit and Improve Processes
Analyze all processes such as inventory management and time clocking to see if you can make improvements to boost efficiency. If, for example, you still rely on manually clocking out, consider a solution that digitizes the process and allows you to generate business data without having to wade through endless numbers.
And, don’t forget about streamlining your employee scheduling…
Optimize Employee Scheduling
Smart scheduling can save you time, improve workforce efficiency, and reduce labor costs. Unfortunately, many café and restaurant owners:
Waste time manually creating and flipping between schedules in spreadsheets
Struggle to track and coach overtime
Use spreadsheets to compare actual vs. scheduled labor which leads to mistakes
Jeopardize customer service by over- or under-staffing on manual schedules
Allow team members to change shifts too often
These proven techniques will help you run a more efficient business during these challenging times and help keep your hard earned profits in the bank! Call Pinnacle Consulting today to complete a full efficiency audit on your business!