PROTECTING THE BOTTOM LINE

Labor management is an essential aspect of restaurant operations that directly impacts the bottom line. Striking the balance between minimizing the total number of hours worked by the crew and providing an optimal experience for the guest can be challenging, but having clear targets can guide success in this area.

One of the most common metrics for gauging labor productivity is “sales per labor hour” (SPLH). SPLH is calculated by dividing the total number of sales by the total number of hours worked. It serves as a productivity metric that allows for comparisons from day to day, week to week, or even restaurant to restaurant.

For instance, if daily sales were $3,000, and total hours worked was 60, then the SPLH would be ($3,000 / 60 = $50). By comparing this to another day, such as $2,250 in sales with 50 hours worked (resulting in $45 in SPLH), it becomes clear which day was more productive. The goal is to achieve a higher SPLH number, indicating greater productivity.

In the context of a restaurant, this metric can be a valuable tool for managers and owners in making decisions about staffing, scheduling, and overall labor efficiency. A higher SPLH signifies that the restaurant is getting more value out of each hour worked, translating into cost savings and improved profitability.

Understanding and consistently monitoring SPLH allows for real-time adjustments and proactive measures. If SPLH starts to decline, it may signal issues with scheduling, inefficient processes, or potential areas for staff training and development.

Furthermore, by benchmarking and setting targets for SPLH, a restaurant can drive continual improvements in labor productivity. This not only contributes to a better guest experience by ensuring that staff levels are in line with demand but also directly enhances the bottom line by optimizing labor costs.

In conclusion, sales per labor hour is more than just a numerical target; it’s a dynamic tool that enables restaurants to balance staffing needs with financial goals. By utilizing SPLH effectively, a restaurant can maximize productivity, enhance guest satisfaction, and, most importantly, improve its overall profitability.