How to Control Labor Costs from Eating into your Restaurant Profits

By Vladik Rikhter

Operating Costs

Labor costs continue to rise fast and furiously. Between higher wages, larger turn-over, and several other factors that are seemingly out of the control of QSR owner / operators, labor costs are eating into restaurant profits more and more.

Keeping this large portion of your operating cost under control is essential to optimizing your bottom line. Here are five tips to help you keep a handle on your QSR labor costs.

1. Review your procedures

You always have to circle back and check yourself. Are you doing things right? Have new technologies developed that may streamline your procedures and make your employees’ time more productive? Stay in tune with your partners and competitors, keep your ear to the ground, and make sure that you are up to date on the latest approaches and technologies that are improving operations.

2. Streamline where possible

An investment upfront? Sure; but it doesn’t necessarily have to be a huge one. Implementing smart changes, where needed, will deliver big ROI by reducing task times and increasing productivity. Some upgrades, like implementing an online time clock, can not only help with productivity, but also transform culture to a degree by setting new standards for behavior.

3. Conquer the “last mile” through technology

Not surprisingly, it turns out it’s a lot easier to design procedures then to roll-out and enforce them. Traditional modes of communications (email, phone, etc) tend to break down because they’re not trackable and since you don’t have visibility into the actual work being done, your people in the field and restaurants feel less accountable. Adopting a mobile operations platform provides you the ability to see inside every store, prompt necessary actions, and ensure everyone feels accountable and empowered.

4. Train people well from the beginning

If they get it right the first time, they don’t have to do it again, right? When onboarding employees, make sure that you train them – thoroughly. When implementing new technologies, make sure everyone has a grasp of them. You’ll save yourself headaches down the road, and you’ll have a more efficient workforce.

5. Maximize sales while reducing in-store issues 

Whether you’re managing a team on your own or you have a battalion of managers, make sure that you’re all on the same page about how you communicate about and encourage workflow and productivity. Nothing can drive direct labor costs up faster than irregular and erratic management. Ensure employee errors and missed sales are kept at bay through consistent processes and real-time visibility.

 

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