Running a restaurant means wearing about twelve hats at once. You’re keeping guests happy, keeping staff motivated, juggling inventory, and trying to make sense of the numbers that keep the lights on.
Labor costs sit right at the heart of all that. They’re usually your biggest expense after food and rent, and when they creep up, it can feel like you’re losing control of your business.
If that’s you, you’re not alone.
Most owners we talk to feel frustrated because they know they’re spending too much on labor, but don’t know exactly where the waste is. It’s usually a few invisible habits built into the way restaurants run. Tackle those root causes and you’ll see a difference quickly.
Here are three practical ways to control labor costs in restaurants. Each one goes straight to the source of high labor costs, not just the symptoms.
1. Forecast And Schedule From Real Data
Most overstaffing happens because we schedule the way we always have, instead of what sales actually need. If you schedule by last week’s habits, you will often be overstaffed on slow shifts and understaffed on busy ones. Forecasting aligns hours with expected sales so you only pay for labor when you need it.
What you can do instead:
- Pull the last 8 – 12 weeks of sales from your POS. Break it down by day and by lunch/dinner.
- Then, set a target labor percentage for each shift. For most concepts, that’s around 28 – 32% of sales.
- Convert the target into budgeted labor hours for each shift:
- Budgeted labor dollars = Forecasted sales × target labor percent.
- Budgeted hours = Budgeted labor dollars ÷ average hourly wage.
- Once you have your budgeted hours, you can build the schedule and assign roles.
With this approach, you are scheduling your staff based on a sales forecast instead of a guess. This prevents you from chronic overstaffing, without cutting service quality. Even a 1–2% drop in labor cost can mean thousands of dollars saved each month.
2. Cross-train And Design Flexible Roles
Rigid job roles force you to staff full positions even when demand doesn’t justify it. One person might be standing idle while another is slammed, and you’re paying for both.
Cross-trained staff let you cover multiple functions with fewer total hours and reduce idle time. That lowers payroll without harming service. Cross-training also improves morale and reduces turnover when staff can grow skills.
What you can do instead:
- Make a one-page skills chart showing who can run which stations (host, bar, expo, prep).
- Offer short shadow shifts so team members can learn a second skill.
- Create “shift templates” that list how many people you actually need, then swap in cross-trained staff, where it makes sense.
- Offer a small premium to employees who can flex into multiple roles.
A cross-trained team means you can cover more ground with fewer people, which lowers idle time and overtime. Staff usually like learning new skills too, which helps with employee retention.
3. Measure Daily And Use Tech Where It Helps
You can’t fix what you don’t measure. When labor costs only looked at once a month, overspending can go on for weeks before anyone notices.
Daily tracking of sales, labor dollars, and labor percent creates a tight feedback loop. Use scheduling software that links to your POS so managers automatically get a report that compares actual vs. budget hours, allowing them to course-correct early.
Many operators see a 1–3% improvement in labor costs within weeks of starting a simple daily dashboard.
What you can do instead:
- Track these 3 numbers every day: Total sales, Total labor dollars, and Labor percent (labor dollars ÷ sales).
- Compare each shift’s labor percent to its target and flag variances early.
- Make sure staff clock in and out accurately and reconcile hours weekly.
- Use scheduling software that links to your POS so actual vs. budgeted hours are automatic.
3-Step Systematic Way to Control Labor Costs in Restaurants
Forecasting, cross-training, and daily measurement aren’t just random tips.
They’re a system.
- Forecasting lines up labor with demand.
- Cross-training makes your team flexible, so you don’t need to overstaff.
- Measurement keeps everyone honest and gives you a way to see the savings as they happen.
Together, they chip away at the biggest hidden causes of high labor costs, without compromising your service levels.
We’re Here If You Need Help
Don’t worry if you’re feeling overwhelmed by labor costs. It’s an opportunity to bring your numbers and your operations into better alignment. That’s exactly what Vast CFO helps restaurants, breweries, and wineries do every day.
If you’d like a hand setting up a simple labor dashboard or making sense of your scheduling, reach out to us today!
