Labor in this Economy

I'm a restaurant guy...

And while food is the main thing restaurants are known for, Operations is what we are seemingly judged on the most. Having a great plate of food is good; however, If you do not have a food-safe facility or the right people to provide service  by cooking or waiting on the customer you can set yourself up quickly for disaster.

There has never been a more important time in my restaurant history to have the right amount of employees in a restaurant at the right time. Due to the state of the economy many people are very particular about where they are going to spend their money. If we cannot provide the desired service for the dollar the customer has in mind then we can set ourselves up for complaints, bad press, and a lot of negative feedback.

The battle between having the proper amount of staff and the right dollar amount of labor is every restaurateurs reoccurring nightmare. (it actually happens every night). We have been fighting labor since 2008 when economy went south. Some of our brothers and sisters did not survive. The ones that did had to endure a lot of change to labor practices and employee incentives in order to maintain operations.

We all know and have felt the problem...the purpose of today is to talk about a few points that can help us get through:

1. Don't hire under qualified people--The economy has forced many employees out of their jobs. The Restaurant worker is no longer on the bottom end of employment. Several of those office workers put themselves through school waiting tables. Interview hard and explain job fully but if a highly qualified individual fits your restaurant bring them on. As a matter of fact, Stop hiring those who are not high caliber. Why would you hire someone who has never waited a table to wait tables when there are a million people unemployed?

2. Reduce average wage--Just like customers, employers must demand value for their dollar. Some companies have reset bartender/server wages to minimum or eliminated busser positions. Some now run a 4 man line instead of 5 by combining stations. Be prudent about who and what you pay for. The day of a guaranteed raise is over. Award performance as your business allows.  Eliminate Over Time immediately. Reset hiring wages to what is being offered in your surrounding areas. Make calls to local smaller and larger chains to find out what they are paying.

3. Use technology--Review data for sales trends and wasted hours. There are several companies out there that specialize in this type of analysis. But most importantly remember that we do not have to do things the way we did them 20 years ago. Computers changed things most especially in the ways of accounting for dollars. Be prudent, use all your tools and run the right labor at the right time.

4. Change your mind--we used to train customers when they could eat at our places by writing our schedules. We were staffed and ready on Weekends but maybe we weren't ready for a Tuesday lunch. ("We always run 5 on Tuesday") Maximize day parts when people are trying to eat at your restaurant. Have enough people to provide service and watch those day parts grow. Some guidelines we can use to operate are: 1 cook for every 2 servers, 1 host for every 3 servers, 1 server for every $100-$150/hr in sales. Also have the right amount of managers for your business.

5. Get more sales---Maybe this should be #1? Market your business as value for customers. Make sure you are gaining profitable sales. Do not give the farm away, stay within food cost guidelines just make it good. Several places have extended hours that they are open. By adding a lunch you may be able to save your mortgage. Being open for an extra hour at night might let your bar business take off. Do not compromise your morals but do something or you become a spectator watching you business fail.

6. Review all non-operational labor expenses--Employee vacations, yearly bonuses, Training costs, Workers Comp costs (do you know if you pay unemployment that the employee could be payed for a year or more?), Employee insurance costs, etc... I am all about being a quality employer but remember it is hard to be an employer if you do not have a business. Please reward employees daily but negotiate everything to reduce unnecessary expenses.

It is crucial that we control labor costs in order to survive this economy. I believe education is the answer be honest and upfront with associates and management and encourage their participation in solution. Most importantly I want us all to know we are in the same boat. Do not run off business by cutting labor. Run the right labor for the business at all times.