As Ontario, BC and many states make a mandatory switch to higher than forecast, wages, most to the 15.00 minimum, we must look closely at ways to maintain both service and staff without driving the cost on to the consumer where possible. So lets look at some of the steps we should be doing and perhaps a few that may be new. Refreshing policies are always a good idea and should be a standard part of our operations. Many restaurants have few controlled areas, mortgage, lease, utilities may not be in your control, but food cost and labor and the ones an operator absolutely must be hands on with.
A) Schedule
The schedule is the daily map to success. Every employee has
one, they “must” maintain it as posted. An establishment that has just 20
employees who sign in or out 15 minutes different than the posted schedule will
cost the establishment an additional 5 hours per day, or 75.00 per day, if left
uncontrolled this would equate to a labor charge of 27,375 per year, the equivalent
to a full time line cooks wage.
Management must be sure employees are signing in and out as per
schedule, and regrettably cutting staff when sales volumes are down.
Most point of sale (POS) systems now allows you to monitor
this information, they keep your records, so you may follow hourly, weekly,
monthly and yearly trends and records. Did you overstaff that last holiday,
check the POS and adjust for the next. A
good manager will know exactly what the labor for the day will be against sales
at every hour throughout the day. Balance your needs with the staffs needs through
considerate scheduling: Create flexible schedules that allow for personal or
family commitments that may be seen as a part of wage payment. Try to avoid
split shifts or irregular scheduling that may prevent employees from having a
healthy work and personal life. Long or double shifts, short shifting, or
called in shifts can have a negative effect on morale and therefore a negative
effect on service.
Have a good mix of full and part time employees. A well
trained part time employee may also be a happy employee, they work the hours
they want and should a full time position become available, they are the first
to acquire the position, a little additional training will be required.
Management must understand what labor cost is made up of
before they can understand how to control it. Every customer makes up the labor
component, whether adult or child each one adds to the labor, at times that 6 year old make take more time
than the adult with him or her. Labor cost is usually expressed as a percentage
of the total net sales. The basic
formula for calculating labor cost is:
TOTAL LABOUR $ / TOTAL NET SALES = LABOUR COST %
Covers per Labor Hour (total covers/total labor hours) Covers
per Labor Hour are calculated by dividing total covers by total labor hours.
(Regular time and overtime) All labor is calculated and all sales are included.
So restaurant with 10 servers working 6
hours each would give 60 hours, while the BOH has a combined full and part time
labor of 40 hours, while sales of the day were 6500 created by 700 covers of
various amounts so the equations would be:
FOH 11.66 covers per hour
BOH 17.6 covers per hour
This is within the benchmark of productivity depending on
the operations a good operator may consider various benchmarks as achievable
targets.
QSR 8.5-10 cover per labor hour
Fine Dining .9-1.4 covers per labor hour
Family Dining 3.8-5.8 covers per labor hour
You may want the reverse knowledge as well when calculating
your labor benchmark, or, Labor Cost per Cover (total labor $/total covers) So
this formula would take the total labor dollars spent so using the minimum wage
of 15 dollars we would have 60 x 15 = 900 then divide by covers dollar amount
or 6500 resulting in a labor parentage of .138 labor hours per guest cover.
Good base operational restaurant should be capable of providing
quality service to its guests while operating at a total payroll cost of
approximately 30%. This figure includes:
1. All
hourly payroll
2. Management
salaries
3. Employer
contributions
The percentage you achieve is dependent on your sales
volume. The hourly portion of your total payroll should be approximately 18% of
the weekly net sales. This does not include management or employer contributions.
Front of house hourly average should be 6-9% with kitchen
labor averaging 10-12%. The ideal is 7% in front and 11% for back with 8%
management.
Costing your Schedule
STEP #1
Forecast sales:
• For each
day of the upcoming week/weeks – check reservations
• Consider
the previous week, same week last month and same week last year
• Look at
special events and holidays
• Consider
day parts (11-5/ 5-9/after 9)
STEP #2
Establish labor budget:
• If
forecasted sales for the week are $50,000.00 and labor is 18%, then $9000 is
available for wages.
STEP #3
Divide the labor budget ($9000) by volume distribution
DAY
|
PROJECTED
SALES
|
%
OF VOLUME
|
DAILY
LABOUR BUDGET
|
Monday
|
$ 5857
|
11.71%
|
$
1054
|
Tuesday
|
$ 6007
|
12%
|
$
1081
|
Wednesday
|
$ 6607
|
13.2%
|
$
1189
|
Thursday
|
$ 7207
|
14.41%
|
$
1297
|
Friday
|
$ 9757
|
19.51%
|
$
1756
|
Saturday
|
$ 8888
|
17.77%
|
$
1599
|
Sunday
|
$ 5707
|
11.4%
|
$
1027
|
$50030
|
100%
|
$
9003.00
|
STEP #4
Establish average wages by department.
Wage Structuring
Establishing wages is an integral part of labor cost
control. Wage structure is influenced by
many factors and may consequently vary from restaurant to restaurant. When determining pay levels, the following
factors should be considered:
1. Local
Labor Market. The degree of job
competition and the availability of job opportunities in the relevant
marketplace.
2. Competition
amongst employers/restaurants in the local market. Your ability to pay is constrained by your
ability to compete.
3. Laws and
Regulations. Minimum wage rates,
overtime, statutory holidays.
4. Individual
restaurant factors. The restaurant sales
volume and your business strategies.
B) Train, Train and Then Cross Train
Think about the cost of employee turnover, the cost to hire
and train a new employee can easily reach over 1,500.00 each. So a manager must
consider carefully before making a staff change, it may be required, but ROI is
found in the employee that your investment is already within.
Have a step by step training method, your employees handbook
is your plan to excellent service, there should be no variance from it. Each
section (from greeting the guest to presentation of the guest check and the
collection of the funds should be covered) is signed off by both the manager
and the employee once he/she has mastered the area, then that signed page
becomes part of the employment record.
Create and have visible daily and weekly checklists, there
the employee finds and knows the expectation of the day and week and requires
reduced supervision to ensure the duties have been completed. Checklists remove
guess work, show direction, give procedures, and make everyone accountable thus
reducing the time required to perform the tasks. All too often a shift ends
without side work being complete, the employee must remain and complete the
work driving up the labor cost while the checklist could have prevented this.
Train and cross train
your staff, a server should know exactly what the busser must do and the busser
should know exactly what the food runner is required to do. Never assume each
knows the others position, train them and they will know. A trained employee
must develop an understanding of how the restaurant functions as a whole, BOH
and FOH although separate in function are both interdependent to the success of
the entire operation, so why shouldn’t employees of both know what each must
endure somewhat. I once created a daily position I called “the dining chef”
this person was required to go and ask each table how their meal was and do it
in a manner that required more than just an “okay” response, okay isn’t an
answer, and if that was the response then we believe the guest did not have a
happy experience. Servers would spend a couple days working in the kitchen to
formulate an understanding of what the BOH staff dealt with daily. Crossed
train employees can quickly move into a secondary position whenever required.
Train employees to know what is happening in the restaurant
on a daily base’s, do they know the features of the day, have tasted the soup
of the day, do they know how many reservation are coming in, have hostess’
confirmed those reservations. Have they
checked the “86” notification board?
Training requires the use of regular “required” staff
meetings, those who miss these meetings drive costs up, so make them requires
attendance. Keep them positive, but deal with the shortcomings that have come
to light. Hold pre-shift meetings, as each shift change’s, and the staff hits
the floor the pre-shift meeting is a great way to relay news regarding the
restaurant (ending local gossip), menu changes, 86 items or shortages and other
important items, eliminating errors and providing for an effective efficient service.
Training will help prevent slow service and will teach staff the proper method
to handle guests when there is a backlog in service.
Hold regular employee reviews, every employee wants to know
exactly how they are doing and a honest employer will let them know. Here the is a great one on one opportunity to
discuss the strengths the employee brings to the team and how they can improve
on areas that they may be weaker in. You
have the opportunity to reinforce the vision of the company and how the
employee can assist in accomplishing that vision.
The following guidelines will assist in running an effective
meeting.
Preparation –
• Define
objectives
• Draft an
agenda – remember to include positives with criticism
• Select a
time and location that will be without disruption or distraction
• Communicate
the meeting time and location in advance
Presentation –
• State the
objectives of your meeting
• Establish
eye contact with attendees
• Maintain
order and direction
• Solicit
questions
• Summarize
key points
C)
Know the Procedures then Perfect Them
A good operation knows and follows “The 5 P’s” Proper Preparation
Prevents Poor Performance. Both FOH and BOH have procedures that are required
to ensure a smooth service BOH refers to this as mise-en-place (everything in
its place) it means is to have all your ingredients prepared and ready to go
before you start cooking. Having to stop and prepare a key ingredient in
service slows or stops that service, so the mise-en-place is absolutely
required. So it holds true in every area of service, are servers side station
properly stocked, how about the bar, every area has to ready so have procedures
to be sure that they are prepared, again checklists may assist here as well.
Your checklists should cover all areas of the unit:
Exterior, Reception
Area, Bar Area, Dining
Area, Back of House (Kitchen), Public
Washrooms,
Customer Service, Staff
Washrooms, Authorized Suppliers, Administration
A professional never considers just “winging it” they know
that is a sure fire way to get into the “weeds” real quickly, and there may be
no getting out. The 5 P’s are the way the kill the weeds and have a great
service.
Planning and Organization
These are essential components to a smooth-running
operation. Planning saves time and money
by identifying the goals you want to pursue in advance. Organizing is the way to implement goals into
the operation.
1. Prepare a
list of the items you need to accomplish, including how to do them. Be specific with the goals and the
anticipated results (ie. money, hours, customers).
2. Prioritize
your goals and concentrate on the top three goals on your list. Do not try to accomplish all the goals at the
same time.
3. Determine
the resources you will need to accomplish your goal (ie. time, money,
equipment, materials and/ or people).
4. Delegate
and establish accountabilities for the goals that you have planned.
5. Set
deadlines or due dates.
