Monitoring your labour costs

Your team is the heart of your business. Having the right level of staffing is important to deliver the best customer service, but it's also critical to keep track of your labour costs as these are one of your biggest outgoings.

Tenzo’s integration with staff scheduling systems helps you monitor your planned and historical labour costs alongside your forecast and actual sales seamlessly.

For example, you are able to look at your sales compared to your average labour costs over the last four weeks, by day of the week. This will enable you to see, as the example for Leeds shows below, days of the week where there are opportunities to increase labour hours to maximise your sales, or days where you are making the same or less revenue with more staff.

Reviewing your planned labour costs

Using the Labour Module in Tenzo you can see your planned labour costs by location, house parts (e.g. kitchen and front of hours) and by role. You're also able to look at how these have changed over time using the trends tab. 

Analysing the planned labour costs by house part or role you can uncover how your GMs are staffing their locations and understand the impact on the customer experience (social ratings in Tenzo). For example, two locations may appear to spend the same amount on labour but one may be spending more on the kitchen team and less on waiting staff and therefore customer feedback is lagging.

Planning labour costs using Tenzo’s Planning Module

If you’re using the Tenzo Planning Module then Tenzo will help you to calculate the recommended number of labour hours you need per location based on your forecasted sales.

You will have been asked to provide the following information for each location to set this up:

• The minimum number of workers at any time e.g. two people regardless of sales,
• The number of workers to open the store with .e.g. one person  to prepare the store,
• The time those workers should start before you officially open the doors e.g. 60mins before you open,
• The number of workers to close the store e.g. three to close the store,
• The time those workers should finish after you officially close the doors e.g. 30mins after you close,
• The threshold over which you need additional people per hour e.g. £100/hour
• The number of employees you need when you hit that threshold per hour e.g. one person to cover an additional £100/hour
• Any additional employees you need during the day 

The Labour Planner in the Tenzo Planning Module will show you the recommended labour hours for the day as well as breaking this down into hours by the hour of the day. The total daily recommended labour hours acts as a guide when setting your rotas for future weeks as you can compare the planned hours submitted in your staff scheduler alongside the recommended hours in Tenzo. Using this comparison you can work with your team so they don't simply reuse the same rota week on week without considering the staffing levels they actually need to meet their revenue target. 

Understanding your cost of labour as a percentage of sales (CoL%S)

Your Labour Percentage or COL%S is one KPI that all hospitality businesses should be tracking. Understanding the COL%s that's right for your business will depend on the type of business you are e.g. quick service or eat in and the customer service you want to deliver. We see this vary anywhere from around 23% to 35% for Tenzo customers depending upon their business. 

Cost of labour as a percentage of sales (or labour percentage) = (Total labour costs ÷ total sales) × 100.  

In Tenzo you are able to see your COL%S over whatever timeframe is most important to you. For example, you may want to compare your COL%S for last week with the week before:

Drilling down into the detail, you're also able to look at your COL%S by day of the week. This can help you to identify potential operating hour changes for your business or staffing levels within the day.

In the example below the staffing levels for Friday afternoon need reviewing. 

In Tenzo you can set a business level target for your COL%s. Setting this target will help focus your General Managers on tracking their staffing levels and help you to frame conversations around the actual performance of the team against these targets. 

 

Accessing Labour Insights

You can set up automated reports to track the labour KPIs that are important for you on a daily, weekly, monthly or quarterly basis. We find that customers at a Head Office level like to see labour cost, hours and COL%S on a daily basis whereas it can be more beneficial for General Managers to focus on labour hours on a daily basis and COL%S on a weekly basis. 

Get in touch with your Customer Success Manager to discuss what KPI reports are most important for you and your team. 

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*Please note that the insights that you can access in Tenzo may be limited based on the Staff Scheduling System that you use. For more information please ask your Customer Success Manager.