Managing Labor Costs

Read this chapter. Pay particular attention to the areas of labor cost and labor productivity. How can the service industry maintain or reduce labor costs while simultaneously boosting performance?

STAFFING GUIDE

Staffing guidelines are helpful for the task of staffing with just enough labor. However, the most exact method of staffing involves direct labor time analysis. Management generally is careful to hire only a basic core full-time crew and add flexible-hour employees as needed.

A staffing guide tells the manager how many labor hours are needed for each position and shift to produce and serve a given number of meals in the given restaurant. It incorporates the productivity standards. It tells managers what number of labor hours are needed for the volume of business forecast for a given meal period. The labor hours can be converted into labor dollars to establish standard labor costs.

The staffing guide serves as a tool for planning work schedules and controlling labor costs. The labor hours in the guide can be converted into labor dollars and standard labor costs by multiplying the labor hours for each position by the wage scale for that position. The staffing guide should be based on the performance of good employees. When scheduling new employees who have not completed an orientation training period, allowances will have to be made for their lower productivity.

This form of staffing guide is much more useful than industry guidelines that do not take into account the specific factors which affect the productivity in your workplace. It may still be useful to compare your staffing guide to other properties in order to assess how competitive you are.

An example of a staffing guide is shown in Table 13.1. Note that the staffing guide shows the minimum number of staff per peak service period.

TABLE 13.1: STAFFING GUIDE

Type of Restaurant Servers Bus Persons Chef or Sous Chef Cooks Dishwashers Hosts
Coffee shop 1 per 25 seats 1 per 5 servers 1 per shift 2 per 65 meals 1 per 100 meals 1 per 10 servers
Casual dining room 1 per 20 seats 1 per 4 servers 1 per shift 2 per 50 meals 1 per 65 meals 1 per 8 servers
Formal dining room 1 per 15 seats 1 per 2 servers 1 per shif 2 per 40 meals 1 per 65 meals 1 per 4 servers


Guide shows minimum number of staff per peak service period.