5 Restaurant Cost Cutting Ideas Every Manager Should Know
“Budgets are tight!” “We’ve got to get our labor strategy nailed down!” “Our investors want to see a better number this year!” Another year, another battle cry to make sure you hit your numbers. But you’re going to do it this year, right? “Right!” you say. That is, until everything else gets in the way. […]
“Budgets are tight!” “We’ve got to get our labor strategy nailed down!” “Our investors want to see a better number this year!”
Another year, another battle cry to make sure you hit your numbers. But you’re going to do it this year, right? “Right!” you say.
That is, until everything else gets in the way. Suddenly, you start to hear the “we need to cut labor” and “I need more hours” conversations fly back and forth. Now, instead of managing the budget, you’re shackled to the schedule, cashing in where you can.
Those temporary solutions are just bandaids that leave your management staff scrambling every year. There are, however, other things your restaurant can do on a regular and proactive basis to hit your labor budget year after year.
Here, we narrow it down to the top five cost cutting ideas we think every manager should know:
1 Forecast at the Quarter Hour Level
If we were the wagering type, we’d bet that most managers schedule staff to start and end a shift at the top of the hour. On the surface, that makes a lot of sense because that’s “normal.” People are used to the traditional 9 to 5 work day.
But if your first guest comes in at 9:30 a.m. and your last at 4:30 p.m., you’ve wasted an hour having someone on staff when there wasn’t a customer to wait on. This scenario has an even bigger impact if you’re in the quick service industry with faster customer turnarounds.
Forecasting at the quarter hour helps you cut costs because it tells you what time you’ll need to bring in more staff and what time you may need less.
For example, maybe you need one person from 9 – 9:15 a.m., and two people at the 9:45 – 10 a.m. If you’re doing half hour or hour intervals, you may not get the right number of bodies on the floor when you actually have guests.
But the quarter-hour time-frame will show you when to bring someone in. In a scheduling system like HotSchedules , managers can use that information to automatically generate a schedule.
2 Validate Punches Against the Schedule
Let’s face it, more employees are going to punch-in early and punch-out the second their shift is over, than the other way around. This is commonly known in the industry as “milking the clock,” and it can cost employers big bucks over the long run.
While we’d like to give our staff the benefit of the doubt — surely those 15 minutes were spent doing something productive for the business — it’s probably more the exception than the norm.
Forced or regulated clock-ins help managers get control over these early clock-ins. It prevents employees from punching in before a specified time and also gives them a little wiggle room if they’re late.
So if, for example, your line cook’s shift starts at 11 a.m., you might set a 15 minute threshold before and after 11 a.m. In this example, they wouldn’t be able to clock-in any time before 10:45 a.m. A server or hostess – who needs less time to prep for their shift – might only get a five minute window around their clock-in time.
The same regulation can be set for employees clocking out. So, in this case, an employee would have a 15 minute threshold before and after 4:15 p.m. to clock-out.
If an hourly employee making minimum wage of $7.25 clocked in half an hour before and after their shift start/end time, and they do this 5 days/week x 52 weeks, the restaurant is losing $942.50. Not that impactful you say? Now let’s say the chain has 4000 sites and at least one employee in every site clocks in the same manner…that’s a loss of $3,770,000.00 annually in unproductive wages.
Enforcing schedule validation can mean the difference in daily and weekly overtime too.
3 Know Your State’s Labor Laws
In order to play the game, you’ve got to know the rules. What are your overtime rules? Do you have to provide break or meal periods? If so, are there any specific time frames in which employees must take them? Do you have a system to alert you when employees are at risk of hitting overtime.
If you don’t know the answer to these questions, we suggest you start reading now!
4 Schedule Meal Periods
If you are in a State that has specific rules around meal periods, rest periods and breaks, you need to make sure you’re complying with the law. Not complying can result in fines, attorney bills or big settlements. (Another reason, if not THE reason, to know your State’s labor laws.)
Including meal periods in the schedule is a fail-safe approach to ensure that meal periods—which are often unpaid time—are scheduled for employees. Assuming the employee takes it, that time can mean the difference in daily or weekly overtime and can potentially reduce your labor costs. Plus, It’s an opportunity for your staff to take a breather, decompress and refuel for the next wave of guests.
5 Get Your Aces in their Places
Do you know who sells the most in your restaurant? You should. And you should give them every opportunity to make more money for themselves, and for your operation.
You can do that by scheduling your aces during peak periods or use a floor map that connects to a roster report to see not just who is working and when, but which sections they’ll be handling during their shift.