How to Reduce Labour Costs in Foodservice

Canada’s hospitality industry has been one of the hardest hit by the pandemic. By early April, 75% of independent restaurants and 65% of chain restaurants across the country were operating at a loss or barely breaking even. 

When Restaurants Canada asked their members what they expect will be their main challenges for the remainder of 2021, labour costs ranked fourth behind government-mandated shutdowns, debt incurred due to COVID-19 and sharply rising food costs. 

“Given these extremely difficult times, restaurants have been forced to look for new ways to control all their costs, including labour,” said Chris Elliott, senior economist at Toronto-based Restaurants Canada. 

“According to our members, some of the most effective ways to control labour costs have been to cut back on hours of operation, streamline menus to improve labour efficiency and use pre-cut and other ingredients that require less preparation time,” said Elliott. 

So, what can restaurant owners do to gain control over their profit margins by cutting labour costs? 

Reducing labour needs starts with hiring right 

· Labour shortages have become a major problem across North America, making hiring the right staff and retaining them even more critical. 

· Post an accurate job description and take time to find a candidate who’s eager to learn and excited to join your team. 

· The more industry experience a candidate has, the sooner he, she or they will be ready to jump in. 

· Schedule interviews so potential employees can meet your cooks and servers. 

· Extensive on-the-job training and good supervision with lots of feedback will help new hires, especially Millennials and Gen Z’s, become productive more quickly. 

· Show your appreciation by complimenting staff on a job well done. Promote top performers so staff see a future in your operation. 

· Demonstrate that foodservice can be a rewarding career by offering advancement opportunities like culinary training and sommelier certification. 

· Industry experts recommend that at least a third of your staff be part-time so you can be fully-staffed at busy times and reduce staff levels as business slows. Having staff to fill in when full-time workers are absent or approaching overtime can also help minimize overtime. 

Need some further tips on attracting employees during a labour shortage?

Cross-train to reduce labour needs

· Training full-time employees to do more than one job is a wise investment. Cross-training, as it’s called, is one of the best ways to maximize your use of staff. 

· This strategy pays off on a slow night when a cross-trained bartender can wait tables, a trained server can stand in for the host and bussing staff can help expedite orders in the kitchen. 

· Cross-training not only allows you to eliminate a role for that shift, but it gives staff new skills and saves the day if someone calls in sick or quits suddenly. 

Schedule smart to reduce labour needs

· Having too much staff on hand is a waste of money, while having too few staff means everyone must work harder longer, leading to tired, disgruntled employees and unhappy customers. 

· Smart scheduling is crucial to help keep labour costs down. 

· When preparing a schedule, look at historic data and analyze traffic patterns and sales over time. 

· Know what’s happening in your community. Are you prepared for a late rush after an important sports game, concert or other big event? Do you have enough staff to handle a full patio on a sunny summer day? 

· Examine your floor chart to ensure you’re not overstaffing to cover underused sections. 

· Above all, avoid the need for overtime. 

· Post the schedule two weeks in advance. Ask staff for a week’s notice when requesting time off or swapping shifts. · Restaurant scheduling software and apps have become essential tools. Use a single app to post or upload the weekly schedule, track time and attendance and keep track of time off and employee availability. Link in staff so everyone’s aware of any shift swaps or changes. 

· While every restaurant owner wants to stay open as long as possible, if staff have little to do at the beginning or end of service reconsider your hours of operation. 

Automate to reduce labour needs

· Along with scheduling apps, a POS (Point of Sale) system is the heart of your operation. Basic features include processing transactions, managing inventory and recording data for instant sales and labour reports. It can also be used to manage and communicate with staff. The goal: to simplify day-to-day operations. 

· Vending machines and other automated systems also help cut down on staff. There’s even a self-pour beverage tap called PourMyBeer that lets guests walk up to a tap and serve themselves rather than chasing down a bartender for every round. 

Streamline operations to reduce labour needs

· Evaluation of existing restaurant kitchens is often an afterthought as a method to streamline operations. For maximum efficiency and productivity, work and storage areas should be close together to reduce time-consuming trips between them. This includes dry storage, coolers, freezers, plate and glassware storage, work counters, grills, fryers and ovens. Adjustments of a few areas can save valuable steps and therefore time.

· Consider a combi oven, which can roast, steam, grill and steam several items at once, or be programmed to braise meat overnight. 

· A blast chiller is another good investment, allowing kitchen staff to cook a large amount of food at once and chill it quickly, a plus for food safety. Store and reheat as needed rather than cooking throughout the day. 

· A food processor can slice, dice and shred vegetables and fruit quickly and evenly for soups, sauces and more, saving hours of labour. One Waring unit can grate 45 pounds (20 kg) of cheese an hour. 

· Match the equipment you buy with your volume of business. If you buy too big a mixer, for example, the extra work involved in cleaning it after use doesn’t warrant the higher price tag. Too small a mixer, however, will reduce efficiency as you’ll need to prepare multiple batches. 

· To keep your kitchen running efficiently, standardize recipes and procedures and create a production schedule. For example, if five different recipes in one day require diced onions, have one cook chop them all at once or buy a manual food chopper or automatic vegetable prep machine. 

· Take a close look at your menu. Is it time to drop some items and simplify others? The more complex the dishes, the more highly-trained staff you’ll need. Smaller menus offer food cost savings in addition to r

· Smaller menus offer food cost savings in addition to reduced labour needs.

· The availability of quality convenience foods, from pre-portioned meats and gourmet desserts to pre-cut vegetables, has exploded in recent years. Compare the time it takes to prepare food from scratch with the cost of buying the same item pre-prepared. 

Written by Cynthia David