What counts as labour cost
Labour cost is more than hourly wages. A true labour cost includes salaried management, hourly staff, overtime, employer statutory contributions (EPF, SOCSO, EIS in Malaysia), benefits, bonuses and casual/agency staff.
Labour Cost % = Total Labour Cost ÷ Sales × 100
Schedule to demand, not habit
The single biggest labour saving comes from matching the roster to forecasted covers. Most restaurants schedule from memory — the same shifts every week — which over-staffs quiet periods and under-staffs peaks.
- Forecast covers or sales by day-part using historical data.
- Convert the forecast into required labour hours per station.
- Build the roster to those hours, staggering start/finish times.
- Compare actual labour cost per hour to sales per hour after the shift.
Track <strong>sales per labour hour (SPLH)</strong>. It tells you productivity in real terms and exposes shifts that are over-staffed for the volume.
Overtime: the silent margin killer
Overtime is usually paid at 1.5× and often signals a scheduling failure rather than genuine demand. A few uncontrolled overtime hours per week across a team can quietly add 2–4 points to labour cost.