Whether you plan to open a restaurant or already have one, running a restaurant business is not an easy task to do. Along with the food, beverages, and infrastructure, labor is another most crucial factor for restaurants.

The pandemic has posed huge challenges for the restaurant industry and also the employees working with the restaurants. The percentage of labor cost to sale average is 22-40% and can go till 75%. Therefore, it becomes important for restaurants and cafés to control their labor cost and maintain their profit margins.

So what all you need to do? How can you manage your restaurant’s cost while ensuring all your needs are fulfilled. Continue reading the blog and find out all the tips that help manage labor and keep your restaurant's operations runs smoothly.

What is Restaurant Labor Cost?

The salaries of your employees and wages constitute the major part of the labor costs. Many other factors constitute the labor cost and include:

  • Bonus for the Employees

  • Investment in health care

  • Overtime pay

  • Sick leaves and Vacations

  • Payroll Tax

Effective Tips To Reduce Restaurant Labor Costs

Here are some of the proposed ways that help to cut down the labor costs while helping you to get rid of the useless expenses:

1. Automate Redundant tasks like Inventory

A restaurant inventory solution is one of the most crucial factors that help to streamline your operations. With this in place, the staff has to spend very little time tracking down the inventory, which leads to reduced labor costs. This not only helps to reduce the labor cost, but also lessens food wastage and improves your bottom line.

Integrating the right restaurant management solutions is exactly what your restaurant needs. It reduces food waste and helps to identify profitable menu items.

2. Optimize the Shift Scheduling

Restaurants may overbook the employees that waste a lot of their money. Business owners need to take a look at the shift and ensure whether the number of staff members is required or not. To find the right balance and stick to the labor budget is crucial. This can be done with the proper POS system that helps to take charge of all your schedule mistakes in a real-time dashboard.

3. Use the Right POS system

The restaurant POS system helps to automate the entire operations, improves the customer experience and their satisfaction. A perfect and right POS system should offer the basic features such as Inventory Management, Customer Relationship Management (CRM), communication and staff management, all the marketing features, labor and sales reports, employee scheduling, and more.

Along with managing the daily operations of your restaurant, an efficient POS system helps to organize profit and loss statements, taxes as well.

4. Hire the Right Staff

Investment in hiring is the key and goes far beyond funds. It requires both time and effort, therefore looking for the right is important, not simply filling up the vacancy.

The wrong candidate hired would be a liability to the restaurant and wastage of both time and money. The hiring cost is about 25% of the employee salary. So, ensure you hire the right staff to continue maintaining your business reputation and benefit your business in the long run.

5. Cross Training of Staff

Cross-training of your staff will ensure they can handle multiple tasks and roles without any hassle. No matter what the situation is and how much crowded the restaurant is, your staff should be professionally capable. With cross-training, you can boost up efficiency, empathy building, get team building opportunities, and much more.

The Bottom Line!

Looking at all of these points, it becomes clear that to significantly maintain the restaurant expenses, restaurant POS system is the key. With automation, you not only cut your restaurant labor cost, but improves productivity as well.

Are you ready to integrate the Smart POS System For Your Restaurant? Discuss your requirements with us and the know-how can we help with!