Labor Cost

I am working right now with a labor % 20 Or less this includes foh management and boh management as well as assets manager and maintenence our bonus program pushes to make it more like 17 % does this number seem like it is about average as a boh manager i find it difficult to keep this number down and correctly manage my staff as to achieve the 20 % or lower i need to work a line for both lunch and dinner . any input on this would help is there a correct or incorect way to split management labor as its own %

20%?? I would love to see my labor percentage that low. I try to get it around 28%. We use a sliding labor scale based on sales, and for last week i should have been 31% or lower against my scale.

Labor cost where you are only counting hourly wages and not the other items like employer share of fica, work comp, unemployment etc are make-believe numbers.

Even more out of the reality zone are labor cost %s where the person working day to day running the store is not paid inside the percentage quoted.

If you want to compare labor costs with other shops here, roll in all the costs and at least a market wage factor for owners working in the store. My labor costs for all labor involved in the operation of the store is 30% of sales. That includes all payroll related costs.

Yeah I am at 25% TO 30% most weeks. Depends on sales figures. Good weeks tend to be 25% I think that you are achieving a great margin at 20%. Does your menu lean towards higher ticket items?

He states in his inital post that he is not counting his own hours. That makes the numbers pretty hard to compare to those from a business where labor is fully reported.

i am figuring my labor % based on my gross sales this does include everyone in the stores operation except our GM who floats between 2 locations most weeks i achieve 18% i just think that 20 % is a tough number for us to achieve considering all people involved the assets manager works in 2 locations to take care of both stores assets but only my labor is affected by it i am just looking for opinions of weather that was low or not and to answer a previous question we do not focus on higher ticket prices I am not an owner i am a manager that has started to oversee all aspects of 1 of our locations up until 1 year ago they never tracked the labor i was just trying to get a feel for how others ran . the owner does not work in the location other then to pay bills.

Yes, you must absolutely consider all payroll related costs… Benefits, work comp insurance, paid time off, etc… We offer our employees a very generous benefits package which is included in our total payroll costs, and we usually come in between 28% - 31%.

The GM should be included. I would suggest applying the GM labor costs pro-rata by sales between the two stores. You also need to gross up all the wages by the cost of employers share of fica, unemployment and work comp. 15% is a good starting point for that. Take the wages and multiply by 1.15.

If your GM wages have a typical relationship to sales, they are making between 6 and 8% of total sales. When you add the manager wages and the gross-up to the 20% you are talking about, you will end up at the 30% we are talking about.