How To Reduce Restaurant Labor Costs

Most restaurants don’t make it to the five-year mark, usually caused by issues like the high cost of running the restaurant. Before you start a restaurant, you need to know that it costs a lot to run one. Labor usually eats up most restaurant owners, and this is why you need to keep track of the number of employees you have and how much it will cost you to maintain them and control them without interfering with the restaurant’s performance. However, you cannot do away with labor since they play a huge role in running your restaurant. In this article, we are going to talk about ways of reducing restaurant labor costs.

Ways of reducing labor costs

  • Keep track of your labor cost

It is essential to keep track of your labor cost because it can end up leading to 40% of your revenue. Tracking labor costs on a daily basis helps restaurants to know when the prices are getting too high. When you monitor your labor cost you can see when a problem arises and when the problem is getting out of hand. When you notice the problem early, you will be able to handle it before it affects your restaurant.

  • Break your staff into categories

When you place your stuff into one category, you won’t know when a problem arises, and you won’t be able to see why the labor costs are increasing. To be safer, you need to break down your staff according to the type of employees, bussers, chefs and pay types. When you do this, you will be able to notice which category is leading to an increase in labor cost and you will either reduce the number of employees in this section or do away with the whole class.

  • Decrease workers turnover

An increase in worker turnover is one of the things that lead to a rise in labor costs. Hiring employees is very expensive, and restaurants usually have the highest number of employee turnover, which makes it very hard for restaurants to control the number of employees they have. Reducing the number of new employees can help you save a lot since you end up using a lot of money when it comes to training and employing new employees often. As a restaurant owner, you should ensure you retain workers by paying them enough wages and providing them with a good working environment.

  • Have a highly trained workforce

How well your employees are trained is what will make them function well. Well-trained employees carry out their tasks much better than employees who are not well trained, and less time is used in monitoring them. When less time is used on supervision, you save up more time on looking into more pressing issues that may be beneficial to your restaurant.


When you start up your restaurant, make sure you investigate the steps listed above so that you can manage your restaurant and you can save up enough money.

Cleaning your restaurant can also be a time consuming and important task that has room for reducing labor costs. Please see the resource below to help prioritize cleaning efforts and ways to clean these germ-riddled surfaces.

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