How to Cut Labor Costs In Your Restaurant Without Losing Your Mind

When you think of cutting labor hours, do you start to panic and think that that means you're going to have to work more hours in your restaurant? Not necessarily. Allow me to show you five steps to cut labor in your restaurant without losing your mind. Everyone, welcome back to the channel. Donald Burns, the restaurant Coach. My mission is to help you maximize your profits and keep your sanity at the same time. Today we'll be diving into a critical topic for restaurant owners. How to cut labor without sacrificing quality and also without driving yourself crazy in the process. So let's get started. Labor costs are one of the biggest challenges facing restaurants today. With an average of anywhere from 30 to 35% of your restaurant revenue going towards labor, it's an area that you gotta really focus on and control. I've seen some restaurants that have labor up to 60, 75, even 80% of their budget and that is a recipe for failure. But don't worry, I have some proven strategies inspired from coaching over 2,500 restaurants over the last 14 years. So I know these things work that are going to help you bring down these costs while still maintaining the quality that your guests expect. Step one is you got to cross train your staff by teaching your team members multiple skills. They can fill in quickly when needed and you avoid overstaffing. Did you know that cross trained employees can increase productivity up to 20% in a restaurant? That's an interesting thing to consider and why you want to think about cross training. Plus, when you utilize a team more effectively, they tend to be happier, they tend to feel more valued and they're a lot more engaged in the work. And that's a strategy I swear by. Step number two is implement an efficient costed out scheduling system. By using advanced scheduling softwares and analyzing your sales data that tells you how to schedule, you can create an optimized schedule that really reduces unnecessary overtime and and ensures you have the right number of staff for the expected demand. Remember that scheduling properly can save you up to 5% on labor cost. And it's a key component of my coaching philosophy. I actually had one coaching client reduce their labor costs 17% by implementing this and using costed out scheduling programs. Step number three is you got to invest in technology. Come on, it's 2023. Streamlining your operations with technology like updated point of sale systems using mobile ordering apps, they can save time, minimize errors and improve overall efficiency. In fact, a recent study by Deloitte said that 40% of restaurant tasks could be automated very easily. What that does, it frees up your staff to focus on providing exceptional guest experience. And I don't know about you, but providing exceptional guest experience is always a plus in my book. Step four. You want to also focus on retaining your top talent High employee turnover, which is rampant in the industry and can cost you up to $5,864 per lost employee, according to Cornell University. So invest in training, offer competitive wages and create a positive culture that will actually keep your staff around. Loyal trained employees are more efficient, they provide better service and ultimately they save you a lot of money. This approach is at the core of success of the very best in the industry, focused on team retention as well as attraction. And step five. You got to keep an eye on that overtime. Overtime is a silent killer and it will add up really quickly to have a significant impact on your labor costs. The best thing to do? Set clear expectations and establish a policy for requesting overtime. Monitor it closely and hold your team accountable for when they break the rules. Keeping track of your overtime will prevent you having unnecessary overtime expenses and and that could save you up to 3% on your labor cost. That's a crucial tip that has saved many of my coaching clients thousands and thousands of dollars. You gotta watch and you gotta measure and manage it over time. By following these five steps, you can effectively cut labor costs in your restaurant without sacrificing quality and still keep your sanity. Remember that a successful restaurant is all about providing an unforgettable experience for your guests while staying profitable. And here's a friendly reminder that profit is not a dirty word. Thanks so much for joining me today. If you found this video helpful, don't forget to like, comment and subscribe for more restaurant tips and tools to make sure you make more while working less in your restaurant. In my next video, I'm going to give you a step by step outline for restaurant business plans. For those that hate restaurant business plans. Until next time, keep growing and thriving and remember to always aim for outstanding because anything less is a waste of your true potential.