What’s known as the “gross labor percentage” is a fair view of the actual dollars you’re spending; however, sales per man-hour can provide a better picture of how effective your schedule is.
Commonly used in quick service restaurants, sales per man hour can be a valuable tool when used in any segment of our industry. As owner-operators and managers, we need to assemble an arsenal of analytical “weapons” to combat rising costs.
Calculating your daily sales per man-hour (SPMH) is simple and is achieved by dividing the total number of hours by the gross sales. A higher SPMH results in a lower percentage of labor regardless of individual pay rates. It is a good idea to calculate the SPMH for each department as well as the total number of hours.
Example:
Working hours
- Front of House (dining room) = 35 hours
- Bar = 24 hours
- Back of House (kit/dish) = 26 hrs
- Total = 85 hours
Sales by Dept.
- Front of house (food and drinks) = $1,800
- Bar (bev only) = $1,000
- Back of House (food sales) = $1,500
Sales per Man Hour
- Front of House = $51.43
- Bar = $41.66
- Back of House = $57.69
Total gross sales = $2,500
Overall SPMH = $29.41
Of course, every type of restaurant operation is different and has different expectations when it comes to staff productivity. A fast food operation can achieve a much higher SPMH than, say, a table service restaurant.
You can be as specific as you want. You can calculate the SPMH for each subdepartment (bussers, dishwashers, bar-backs, etc.). After doing this for a few weeks, you will begin to see patterns emerging within each department. Going one step further and calculating the figures for the parts of the day (bfst, lunch, etc.) will provide very accurate information. For most operations, a simple general SPMH is sufficient.
SPMH is a great tool and can be used to help you write more effective schedules. The written schedule is your most effective method of controlling work. Constant evaluation of productivity is crucial to an effective written schedule.
