4 Simple Steps to Reduce Labor Costs
As a restaurant operator, optimizing labor spend is a complex challenge. You're faced with ever-changing customer demand, fluctuating availability of your workforce, and variable costs.
So how do we make sense of this chaos and help restaurants ensure they aren’t overstaffing or understaffing and leaving money on the table?
We think it comes down to four main things:
1. Having a good forecast
This is the foundation of your plan. If you don't get this right, you'll be left struggling. It's crucial to understand not only how many customers you will have but also how they will visit, when they will arrive, and what they will purchase.
Rightwork automates this forecasting process with advanced machine learning. It analyzes your historical sales data and predicts future trends down to individual products and channels (in 15-min increments). The AI algorithm continually improves and looks at factors such as historical sales, weather, holidays, and events.
2. Creating labor budgets
Being able to properly represent the work required throughout the day and determine how many people are needed to complete that work empowers managers with the guidance they need to confidently create their schedules.
Rightwork accomplishes this by allowing you to easily build and test a labor model that converts the forecasted demand into optimal and precise labor budgets throughout the day.
3. Scheduling within budget
If scheduling is too complicated, managers will end up frustrated and unable to focus on meeting their targets. They may simply reuse last week’s schedule, which doesn’t account for expected changes in demand.
Rightwork acts as a scheduling assistant, helping managers create schedules that stay within labor budget goals or even generating optimal schedules for them automatically.
4. Knowing what success looks like
Knowing what a good schedule looks like before the day starts and what successful performance looks like afterward creates accountability and motivates the team to succeed.
Rightwork offers clear metrics on what makes a great schedule, including schedule grades, labor budget visualizations, and daily email reports to help managers stay on track with their labor targets.
Conclusion
By concentrating on these four crucial areas—accurate forecasting, effective labor budgeting, efficient scheduling, and clear success metrics—restaurant operators can greatly reduce labor costs and improve overall efficiency. With this approach, Rightwork has helped our customers reduce instances of suboptimal staffing from around 50% of each day to less than 5%. If you find yourself struggling with labor cost management, don’t hesitate to reach out and discover how we can assist you in achieving similar results!