In the world of hospitality, managing costs effectively is an ongoing challenge. Traditionally, labour ratio has been a key metric for measuring success, but we think a more nuanced approach is needed to ensure both efficiency and quality. At S4labour, we use the metric of ‘slack hours’ to measure the effectiveness of cost management.
Slack refers to labour hours used on the rota that are above what is needed to deliver the agreed service levels. It’s the extra time that can be utilised for tasks like polishing cutlery and cleaning menus, without putting undue pressure on the staff. Finding the right balance of slack is crucial – aiming for around 25% slack is considered optimal for many businesses, but there are variations depending to scale and style of site.
The pitfalls of too much slack:
Overstaffing, with high levels of slack for a prolonged period, is not only a poor use of labour budget, but it also leads to a decline in team energy and concentration levels which ultimately affects service quality. Striking the right balance requires consideration of the specific needs and scale of your business.
The importance of rightsizing:
The size of your business plays a role in determining the ideal slack percentage. Larger sites can operate with lower slack percentages (around 15%), as more team members allow for better-designed shift patterns. This nuanced approach ensures that the right amount of slack contributes to a well-functioning operation without compromising on service.
Adjusting labour costs not only optimises efficiency, but it will also lead to happier staff and improved service quality. By managing slack hours, you create an environment where employees can excel without the stress of excessive workload.
Finding the right balance between labour costs and service quality is ultimately the key to better cost management. When measured and used effectively, slack becomes a powerful tool for improved service and staff satisfaction. Whether you run one bar, or manage multiple restaurants, success starts with optimising your labour costs.
Get in touch with S4labour to explore how we can help you to cut the slack and run a more efficient, happier and service-oriented business.