Labour
Reducing labour costs without reducing service
Labour is the largest controllable cost in most hospitality businesses and the easiest one to damage the business with. The operators who get this right do not cut hours. They move them, and they raise the output of each hour worked.
Start with demand, not with a target
A blanket instruction to take 5% out of the rota produces thin peaks and resentful teams. Instead, build the rota from sales by half hour. Almost every business we look at is carrying surplus hours in mid-afternoon and running short between 7pm and 9pm.
Fix the pinch points that cost hours
A slow ticket printer, a badly laid out pass, a stockroom on the wrong floor or a POS that needs four taps to add a drink all consume paid minutes every shift. These are cheaper to fix than they look and the saving is permanent.
- Time the ten most repeated tasks in a shift.
- Remove or shorten the three worst.
- Re-time after two weeks to confirm the gain is real.
Raise revenue per labour hour before cutting the hour
Labour cost percentage improves from either side of the fraction. A team that is confident describing the wine list, desserts and upgrades lifts average spend without any additional hours, which improves the ratio while making the guest experience better rather than worse.
Give managers the number daily
A manager who sees labour percentage the morning after each shift will manage it. A manager who sees it four weeks later will explain it. Daily visibility is worth more than any single rota change.
The takeaway
Target output per hour, not hours. Two to five points of labour percentage is normally available without a single guest noticing anything except better service.