Although simply slashing a shift from your floor plan is a sure-fire way to reduce labor, it’s also a sure-fire way to decrease guest service and satisfaction.
Not paying a staff member can definitely save you money, but it can also get you into big trouble with the labor board. Go figure.
There are many ways you can go about reducing your restaurant’s labor. But the real question is: How can you reduce your labor costs without wreaking havoc on the experience of your guests and staff members in the process?
And here’s the answer:
Use a simple piece of paper to track employee hours worked.
Right now you're probably feeling a bit confused and thinking, “This guy’s an idiot.” And I don’t blame you...but follow me on this one.
In this day and age, most restaurants are tracking labor in one of two ways: a manual sign-out sheet or an electronic time clock (POS, biometric, mobile app, etc.).
These systems are great for tracking, but have one primary flaw: they put too much control in the hands of the employees.
Here are some simple reasons why they can fail:
- The employee forgets to punch in or out.
- One employee punches in for another (buddy punching).
- Incorrect times are being tracked (total hours, breaks, etc.)
So here’s where this simple piece of paper saves the day.
Have your manager track actual labor using a separate piece of paper and compare with what’s listed on your manual sign out sheet or electronic time clock.
This enables your team to catch any inaccuracies with the data, and it prevents you from overspending.
Here is a Free downloadable template for your reference.
If you’re not double-checking the information tracked in the POS, you’re likely leaving money on the table. Let’s look at an example:
Imagine one employee signs out just 15 minutes late for a shift, every day for one year. If we assuming full-time hours at a $7/hour wage, that adds up to $455.
Now on a single day, that total might not seem like much, but ask yourself:
- How many employees do you have at your restaurant?
- Is it possible that more than one employees are repeating this situation daily?
- How much could be you losing every day? Every week? Every year?
Let’s look at the numbers if five employees were to steal just 15 minutes daily over the course of one year. That could add up to as much as $2,275! Scary.
With average restaurant profit margins falling somewhere between 2-6% on the year, every dollar counts.
In addition to saving on restaurant labor costs, here are three other situations where tracking labor separately has added advantages.
1. Labor Disputes
Have you ever been in a dispute with an employee over wages? It’s an unfortunate situation, but one that you can usually resolve without hurting too many.
What about a dispute over wages with a disgruntled employee where the Department of Labor gets involved? It’s like walking in on your parents having sex... You never want it to happen. Ever.
If it does happen however, you want all the ammo you can get to help you through the process unscathed.
Here’s a great practice: On the sheet that your managers use to track the labor, have your employees initial beside their actual hours that have been tracked. Keep the sheets in a binder for future reference and protection.
2. Manager Accountability
In addition to employees signing off on the hours they worked, the manager running the shift should also sign off on each sheet. Having your managers initial off on their completed labor plan for the shift provides a sense of ownership and accountability.
If you’re an owner or general manager, this practice can also provide you with an understanding of how each manager on your team is performing and where there may be opportunities for improvement.
3. Historical Reference
If the first two points weren’t reason enough to start using a sheet to track labor, there’s a third benefit for you: historical reference. Having the ability to look back at past weeks’ shift plan execution is very valuable when planning labor for upcoming weeks. That insight will help you watch for possible trends and create more accurate projects moving forward.
So no need to go to extreme measures – there really is a shockingly easy way to improve labor without sacrificing your guests’ or staff experience.
And all you need is a pen and paper!
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