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Sloppy scheduling can cost you big headaches and drains on the bank account. Labor forecasting will keep costs low.

Labor... it's one of the biggest challenges, and costs, we face as operators. Luckily, there are many ways to keep it under control. The best place to start is at the beginning -- scheduling. Sloppy scheduling can cost you big headaches and drains on the bank account.

No matter how small your staff, you should build a schedule based on a budget forecast in dollars. Think of your schedule as nothing more than a purchase order for labor. That's right. You need to "order" enough labor to cover your sales projections. Based on historical data, upcoming events (catering, large parties, etc.), and other factors contributing to projected sales, you must determine how many dollars in labor you need to spend. For example, if you forecast $20,000 in sales for a week and your labor cost goal is 30%, you have $6,000 in available labor dollars you can spend.

Start by scheduling the key positions: managers, top servers, bussers, and kitchen personnel. Once the slots are scheduled, calculate what that schedule will cost in dollars. If you've over-scheduled, look for places to cut back. If you've under-scheduled, make sure your shifts are adequately covered, and then rejoice if you're still under budget!

At the end of the week, compare your actual labor dollars to what you forecasted. We've detailed a comparison on the next page and pointed out typical problematic areas. We've also provided an actual-to-forecast comparison worksheet so you can do it yourself.

A few things to keep in mind:

• Many computerized timekeeping systems, and even some POS systems, can help by doing many of the calculations for you. They can even prevent early punch-in's. But you'll still need to do your own forecast.
• Be sure to adopt "zero-based" scheduling. Many managers use the schedule from the prior week as the basis for the current schedule. Labor shortages are addressed by adding more people to the schedule instead of analyzing and adjusting the schedule itself. Unfortunately, this results in ineffective coverage and a rise in labor cost. To obtain the maximum coverage for the minimum dollars, all schedules should be "zero-based": built from scratch based on your forecast.
• Managers usually schedule start times on the hour or the half hour. I recommend adjusting scheduled times by using 10-minute increments. For example, a shift could begin at 5:40 PM instead of 5:30 PM. You will be amazed at how many labor dollars can be "squeezed" out of your schedule by eliminating 5-10 unnecessary minutes per server per shift. Most employees will arrive on the hour or half hour, the extra ten minutes gives them time to check their mail box, wash their hands, and get ready to punch in on time.

Here's an example of what a comparison of your actual vs. forecasted labor costs might look like. We've made some notes below as to what you could learn from the comparison.

In this example, the actual sales for the week were much lower than the forecasted sales. This could have been due to uncontrollable factors, such as bad weather, road closures, etc., but more often than not, the variance is due to poor forecasting. Make sure you review historical data carefully and take local events into consideration when forecasting.

• Even though actual labor dollars ended up being lower than the forecasted dollars, the labor cost percentage was more than five points higher. Not good. If the actual sales had been scheduled at the desired 30.07% labor cost, labor dollars would have been $9,768, and we would have saved over $1,665 in labor dollars.
• Take a look at the server dollars. Due to lower sales volume, we obviously had to send a lot of people home. We didn't pay the wages, but most likely ended up with unhappy workers. In the long run, this can be even more costly!

Download one of our manual or Excel worksheets to do your own comparison.

Bill Main, FMP, FCSI, is a nationally-recognized author, foodservice consultant, and professional speaker. His goal is to help you define who you are, where you want to go, and the best way to get there. Bill Main & Associates (www.billmain.com) offers a wide range of consulting services, resources and tools in the areas of strategic growth, marketing, menu, leadership, training, and management development.