Restaurant Management: Controlling Labor Cost

Posted by Reinecke Jesslyn on August 31st, 2009 filed in Productivity

In the not-too-distant past, controlling labor in a food-service establishment was mostly an instinctive process. Effective labor control meant having just enough people on hand during a rush to keep the operation from going over the cliff, and by sending people home as quickly as possible as the rush died down.

In order to make projections of future sales, restaurant manager keeps track of their business for the past few weeks and converted those numbers into an employee schedule. The success or failure of those efforts was determined at at night when the store closes, the manager sat down on his desk with a stack of time cards and calculated the day’s labor percentage.

Luckily today, these manual tasks are eliminated with the help of a restaurant POS system where managers can easily do multiple tasks with a few mouse clicks and keystrokes.

And since the minimum wage sets to rise to $7.25 for the next few years, business owners looks for management tools they can use for labor cost control.

Jim Phillips general manager of a Pizza Inn restaurant, tracks labor throughout the day via the store’s POS system. He uses a restaurant point of sale system from Pixel Point.

“I check my labor cost every 45 minutes when I’m in the restaurant,” Phillips  said. “I can pull it up on the terminal, hit labor cost and it tells me where my labor stands, or if I want to I can go into my hourly stats and look at those,” says Phillips.

What’s great about a restaurant POS systems is that is can display forecasted sales, actual sales and a variance between the two. It can even show scheduled hours versus actual hours for added convenience.

“The system tells me everything I need to know,” Phillips said. “I can look at the POS and see the number of pickups for any given hour; the number of dine-ins and the number of buffets. It gives me my supervisor hours, my kitchen hours and my assistant’s hours all in a breakdown.”

POS is your extra pair of eyes

Other POS reports show labor trends over time, and owners or district managers can track labor cost manager performance shift-to-shift, said the marketing manager of Speedline Solutions Jennifer Wiebe. This system also provide detailed reports on manual editing of time clock reports where potential abuse can easily be spotted.

You can even use the detailed information provided by time clock reports for labor board reviews of attendance-related employee terminations.

And by the end of the day, your POS system can generate payroll- and employee-information export files to integrate with above-store accounting systems or third-party payroll services.

The POS also can assist managers properly assign employee-shift by forecasting sales and generating a schedule based on those sales.

Operators can efficiently schedule to meet their labor targets using sales forecasting and their labor plans. The Pixel Point scheduling tool is linked with employee skills and availability that can speed up the scheduling process.”

Restrictions on hours and breaks for minor employees can be enforced through schedule- and time-clock alerts. The schedule also can be linked to a built-in time clock that requires a manager’s access to override untimely ins and outs.

Operators usually set their clock-in and clock-out times very close, within 5 minutes.

There would be no way that an employee can clock in until 5 minutes before their scheduled shift or clock out late without a manager override using this system. can tell if an employee is supposed to be on day-off but he is still on the clock.

This article’s author is the Vice President of Customer Relations at POS-FOR-Restaurants.com - a national organization of retail and restaurant POS systems dealers.

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