Manage the labor or you ARE the labor.
Restaurants are magnets for interesting “out of the box” thinkers, often attracting people with an amazing blend of “artsy” and “scienc…y?” innovators. Unfortunately, they can also attract a “night owl” workforce who finds a career to support a socially questionable after-work lifestyle. In these cases, I contend, the line between work and play is very thick and blurry. Don’t get me wrong, it’s a business and plenty, if not most, restaurant managers and employees view their jobs as careers. Respectable careers that support families and play an important role in the community. For the others that use the late hours and party atmosphere to jump start their social lives, the restaurant is a haven for poorly supervised debauchery. Drug and alcohol abuse, on and just after the job…it can be a pre-party.
Unfortunately for the restaurant owner who wants to operate their business from afar, the lack of business discipline can chew up profits as fast as they come in. In the case of failing restaurants, an inability to manage key areas eventually leads to failure, often to the owner’s surprise.
A restaurant’s prime costs are made up of Cost of Goods and Labor. Together, they consume about $.55 to $.65 for every dollar made…in a well run operation. Throw in Direct Expenses (china, silver, glass ware, paper goods, supplies, repairs), Operating Costs and Occupancy Costs and a good restaurant is lucky to deliver $.15 per dollar to the bottom line. Cost of Goods is tough enough to manage… spoilage, theft, over ordering, pricing, waste…but poor labor management is just plain lazy.
Restaurant sales are relatively predictable and labor planning is much more of an an exact science than managing food cost. The target is 30% of sales for management and hourly labor plus benefits, taxes and (some say) uniforms and employee meals. Project the sales, back out 30% and voila!…there’s the dollar amount you are allowed to spend. Smoosh it around any way you like but don’t go over it. Schedule it to the minute. So why is it so hard? In well managed restaurants it is still difficult but the culture is that of a serious business, created to generate profit. In poorly managed restaurants, the managers are little more than deputized line cooks or servers who have never been taught how or held accountable for delivering the scheduled labor. If every cook in the kitchen leaves 15 minutes late every day, by the time Friday or Saturday rolls around, they are headed for overtime long before the busiest part of the shift hits. “Jefe, I’m about to go into overtime. Would you like me to go home?”….”Gee Tommy, it’s 7:30 on Friday night…go ahead and stay until 9:0o like you were scheduled” Tommy is psyched. No one challenged him all week and when the day to challenge him came, he had the restaurant by the short hairs. Is Tommy to blame? Nope. He didn’t know it was important and he was nice enough to alert the manager. I’d say Tommy is close to being a model employee just for bringing it up. The problem is that there is no culture of accountability and it starts with the owner.
Reconcile Labor Daily: Every day, at the beginning of every shift, the shift manager (sous chef or kitchen manager for kitchen employees and service manager for service employees) should know precisely who is coming in, how many hours they’re scheduled for the week, how many hours they’ve worked OVER or UNDER their scheduled hours so far and how many hours they have to go before they hit overtime. Fortunately, most Point of Sales systems include a time and attendance program that allows the manager to print a shift roster anytime they want. The roster consolidates this information for the manager so all they have to do is review it for 5 minutes before the shift, using it throughout the shift to drive productivity. Toward the end of the shift, they simply inspect their employees’ work and manage them to finish their tasks and leave on time.
Hold Managers Accountable: After every shift, after all employees have clocked out, the manager should review their “actual vs. schedule” performance (again…a report feature in most modern time and attendance software systems) to ensure they didn’t miss anyone. By the end of the week, when sales projections are coming true, labor performance is on track. The General Manager, and ultimately the owner, will review actual vs. schedule every week before posting payroll.
Inspect the Late Night: in general, the biggest labor problems occur at the end of the night as employees who are not scheduled to work later linger to wait for their friends to get off work. If the managers are not controlling their labor, politely tell them, “manage the labor…or you are the labor”.
