Transcript Labor Controls - Chef Nick Boland

Labor Controls
• In most restaurants, labor is the second
highest cost of sales.
• The total of all costs associated with
maintaining a workforce
• This includes Payroll
Payroll
• The gross pay received by an
employee in exchange for his or her
work.
• Payroll is only one part of labor
expense
Other expenses of Labor
•
•
•
•
•
•
•
•
FICA Taxes
Unemployment Taxes
Worker’s Compensation
Health Insurance
Pension Plan Payments
Employee Meals
Vacation/Sick Leave
Employee Incentives and Bonuses
Payroll
• Salaried Employees
– Receives the same income per week or month
regardless of the number of hours worked.
• Fixed Payroll
– The amount an operation pays in Salaried Employees
• Variable Payroll
– Those dollars paid to hourly employees.
– Added in relation to the number of guests anticipated to
be served.
– Management has nearly 100% control over variable
labor expense.
Turnover rate
• Turnover rate
• (# of employees separated / # of
employees in workforce) = Turnover
Rate
Steps to managing Labor
• Know your peak periods of business
• Place your best employees where they will
be most productive
• Watch time in’s and time outs
• Cross-train your staff
• Monitor labor costs hourly
• Communication with FOH
Managing Payroll
• 4 Steps to managing Payroll Costs
– Determine Productivity standards
– Forecast Sales Volume
– Schedule employees using productivity standards and
forecasted sales volume
– Analyze results by comparing the actual costs to the
budgeted cost
Preparing a Labor Proforma
• What you need to know
– Budget
• Tables, chairs per table, PPA, days open, turns
– Average Pay Per Employee, average # of hours
per week per employee
– Productivity goal
Preparing a Labor Proforma
• Step one…
• How much money will we make?
– Tables X chairs X turns X PPA X days open
• Step 2
– How many Employees will we need?
• Income / Productivity Goal / hours per week per
employee
• (add 20%)
How many hours can we spend?
• Divide the income you expect to make in 1
week by 70 (productivity goal)
Writing the schedule
• Next, divide the hours available into the
days you are open for business.
– Use more hours on busier days
• Write your schedule, not exceeding the
number of hours allotted
Productivity versus Labor cost
• Productivity- a clear picture of how
productive your kitchen is, excluding
factors and excuses such as
– Everyone is on overtime
– All the highest paid employees are here
– income for that department / # of hours worked
Performa is a tool
• A Labor performa is a tool, when used
properly, it can help generate a good labor
cost, however, it is not the total picture.
Insure you have enough labor to properly
care for the guest.
Averages
•
•
•
•
•
•
•
Cooks $7.25 to $12.00
Dishwashers $7.25 to $8.00
Waitstaff $2.13 +
Trainers $4.00 +
Hostess $4.00 + tip or $8.00
Bartenders $5.00 +
Managers 30k to 45k
Overtime
• Any hours worked past 40 is time and a half
• DOL.gov