Managing Labor Costs
INTRODUCTION TO LABOR COSTS
Controlling food costs is an important component of ensuring the profitability of your food service operation. However, food costs are only part of the picture. It is also necessary to control labor costs and forecast labor demands accurately if your business is to succeed. If you have more staff than is required, your labor costs will be too high and the company will lose money. If you have insufficient staff for a particular time period, customer service will suffer. Your goal in planning staffing and scheduling needs is to match labor supply with customer volume so that you can provide quality service without excessive cost.
The food service industry is labor intensive. Technology has not replaced people with equipment (though some foodservice operations are experimenting with robots which cook and assist in service). Unlike an automobile manufacturing plant, a restaurant cannot store its product until tomorrow or the next day if customers are not buying today. The same seat in the restaurant can only be sold a fixed number of times, based on the operating hours and number of turns (rate of turnover of customers). Therefore, it is critical to be able to forecast the number of customers you will have, the peak customer periods, and the staffing needed to provide service to those customers.
Sound human resource management policies can increase the productivity of staff. You must first choose qualified, interested, and trainable employees. Once these employees have been recruited, they must go through an orientation period in which they learn about the job and their responsibilities, the company's way of doing things, and the required level of product quality. During this initial period, the employee's productivity might be low.
Accurate job descriptions, a good orientation to the job, adequate on-the-job training, and good supervision with lots of feedback about job performance will assist employees in becoming productive as soon as possible (but human resources management is a different course of study).