Managing Labor Costs

Fixed Labor Costs

One factor that must be considered before developing a staffing guide is fixed costs. Fixed costs refer to the costs of running the operation that does not vary depending on the volume of business. For many businesses, the cost of the building, heating, lighting, insurance, and other similar costs are fixed. They do not change if the restaurant is busy or half empty. In fact, they continue even when the restaurant is closed.

Some labor costs are also fixed. If a restaurant has salaried employees, these costs are fixed and do not change depending on the volume of business. The business must pay the salary of these employees, even if the restaurant is not busy. In most restaurants, management positions, including the chef and sous-chefs, are salaried employees.