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Smart Chef

How to Cut Labor Costs in Restaurant

According to the restaurant labor cost formula, the labor cost percentage is your labor cost divided by the total sum of your sales of the same period. Labor costs are one of the highest expenditures for any restaurant owner. Here’s how to manage labor costs better.


12. Avoid overstaffing

Overstaffing is a common problem for restaurants and one that can lead to massive money waste. Learn when your slow periods are so you don’t have employees standing around doing nothing. That said, make sure you have enough staff during rush hour to avoid the opposite effect.


13. Hire smartly

Learn how to control labor cost in your restaurant by hiring the right people from the start. But what does it mean to be the right person for your restaurant’s staff? You need employees who understand your restaurant culture and will fit in immediately. Don’t let someone’s lack of experience deter you from hiring them. As long as they seem right for the job and are willing to be trained, it might be worth taking a chance on them. To cut labor costs, hire people who are excited to work with you and want to be there in the long run.

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