Labor costs typically run 30-40% of revenue in food service. In a restaurant doing $1 million annually, that's $300,000-$400,000. Even a 5% improvement in labor efficiency saves $15,000-$20,000 per year—without sacrificing service quality. Most operators I work with have never analyzed their scheduling efficiency.
The Basics
Understanding Labor Metrics
- Labor percentage: Total labor cost / total revenue
- Hours per cover: Total hours worked / number of guests served
- Prime cost: Labor + food cost combined, typically should be under 65%
Building the Schedule
Step 1: Know Your Projections
Review sales by day and time. Look at:
- Day of week patterns
- Seasonal variations
- Special events
- Historical trends
Step 2: Build from Sales Down
Don't schedule based on who's available—schedule based on expected business, then fill positions. This is counterintuitive but essential.
Step 3: Right-Size for Each Shift
Many restaurants are overstaffed during slow periods and understaffed during peaks. Identify your actual busy periods and ensure coverage there.
Tools and Technology
Scheduling software has come a long way:
- 7shifts, HotSchedules, and similar platforms offer affordable scheduling with time tracking
- Many integrate with payroll systems
- Employee self-service reduces manager time
Managing Overtime
Overtime can quietly destroy profitability:
- Monitor weekly overtime carefully
- Cross-train employees to even out coverage needs
- Set alerts for approaching overtime thresholds
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