Labour Costing
17 Productivity
Controlling food costs is an important component of ensuring the profitability of your food service operation. However, food costs are only part of the picture. It is also necessary to control labour costs and forecast labour demands accurately if your business is to succeed. If you have more staff than is required, your labour costs will be too high and the company will lose money. If you have insufficient staff for a particular time period, customer service will suffer. Your goal in planning staffing needs is to match labour supply with customer volume so that you can provide quality service without excessive cost.
The food service industry is labour intensive. Technology has not replaced people with equipment. Unlike an automobile manufacturing plant, a restaurant cannot store its product until tomorrow or the next day if customers are not buying today. The same seat in the restaurant can only be sold a fixed number of times, based on the operating hours and number of turns (rate of turnover of customers). Therefore, it is critical to be able to forecast the number of customers you will have, the peak customer periods, and the staffing needed to provide service to those customers.
Sound human resource management policies can increase the productivity of staff. You must first choose qualified, interested, and trainable employees. Once these employees have been recruited, they must go through an orientation period in which they learn about the job and their responsibilities, the company’s way of doing things, and the required level of product quality. During this initial period, the employee’s productivity might be low.
Accurate job descriptions, a good orientation to the job, adequate on-the-job training, and good supervision with lots of feedback about job performance will assist employees in becoming productive as soon as possible.
The cost of labour required for a fixed period of time; usually reflected as a percentage of sales
A measure of the amount of work done in a fixed period.