Labour cost percentage – labour cost as a percentage of revenue

What is it?

Labour cost as a percentage of a restaurant's revenue is called labour cost percentage. It indicates how large a share of the restaurant's total revenue is spent on staff.

Why does it matter?

An optimal labour cost percentage ensures the restaurant runs efficiently without tying up unnecessary capital in staffing overheads. Keeping this figure at a manageable level is crucial to maintaining profitability.

How can you improve it?

Focus on optimising scheduling so that staff are used when they're genuinely needed. Offer training and development opportunities that raise productivity and reduce staff turnover.