Business Insights

Let’s Talk Labor: Hiring, Wages and Tips

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Let’s Talk Labor

Chances are about one-third of your revenue goes toward recruiting, training and retaining the right people, if you’re the average restaurant. So it’s a good place to manage and tighten up your overall operational costs. Managing staffing expenses better and smarter can make a big difference in your revenue stream.

Keepers are Cheaper

Ever stopped to analyze what it costs you when a worker chooses to leave for greener pastures?

First, there’s your (or your staff’s) time – to run ads, interview candidates and train new hires. Next there’s expense – for those same ads (if paid ads). Last but not least – productivity, usually the most difficult concept to grasp. When turnover is high, the pressing need to hire and train can distract managers from other important tasks. Along with the reduced productivity by the newbies themselves, the undesirable result could be lower customer satisfaction.

Hires & Fires

That means it’s extremely important to get the right person in the right job for the right length of time. Start with savvy interview questions: ideas abound online. You’ll find one thoughtful list here. Reference checks are crucial, too – you can find even more tips at Solid hiring is your opportunity to ultimately reduce the amount of firing you do. In turn, you can lower your chance of litigating unemployment benefits, instigated by terminated employees. You do want to minimize the rate of tax you’re paying to fund that program, right? (And, you want to keep the risk of being sued for unfair termination as low as possible.)

Speaking of Insurance

Up to speed on COBRA? Employees who leave voluntarily and those who are terminated both have access to COBRA. This federal law allows workers to continue to receive health insurance coverage through your business’s plan, if they had it as part of their position. Participants generally pay the entire premium themselves. Details can be found at, but you may want to consult an employment attorney as well – a good idea for any unclear or complicated issues.

On the Way Out

Always ensure at least a few minutes to formally ask outgoing employees – in any job position –why they’re going. Then, listen carefully, documenting the answers and looking for patterns person to person. Anything you can learn from?

Tips vs. Wages

Replacing a tipping structure with higher wages is an option still playing out in the industry. Some restaurants have raised prices; others have cut staff. Your most important customer here: Your employees. It never hurts to ask their opinion, especially those you most want to hang onto.

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