8 Strategies Saudi Restaurants Use to Control High Labor Costs

09 Sep

According to a new study, Saudi Arabia is actively healing from the pandemic, and 80% of its employers plan to expand their workforce in 2022.

Are you a restaurant business owner in Saudi Arabia looking to expand your business but stuck with the high restaurant labor costs? If yes, you must be looking for a quick solution to handle this, isn’t it?

Then dive into this article and grab these seven strategies to control the high restaurant cost. We have also included how indulging restaurant POS systems in Saudi Arabia can reduce labor costs. Now let’s learn about them.

Practical strategies that Saudi restaurants can utilize to control high restaurant labor costs:

1. Minimize employee attrition rate

If your employee retention is poor, then that’s a serious problem. The pandemic has not only changed businesses but also changed workers.

Some recent studies show that the hospitality sector is facing attrition rates. So, how does attrition affect business?

For instance, let’s assume you are a restaurant business owner based in Saudi Arabia. When a new employee joins the team, you spend your time and money to train them. If they leave after a few months, your time and money are gone.

So, this is why a high attrition rate is one strong reason for high restaurant labor costs. It depletes your revenue. To control employee attrition rate, develop better growth opportunities, incentives, and good work culture.

One step further, you can provide specific employee welfare policies and team-building exercises. These practices can help in retaining employees.

2. Cross-train the employees

Restaurant operations include customer service, food preparation, cleaning, accounting, reporting, purchasing raw materials, etc. You will have a working structure and a team of whom must perform what operation.

But what if there are unforeseen and sudden openings in the restaurant and you lack a particular employee to do a task? This can end in chaos.

This is where cross-training exercises will lend a hand. Cross-training exercises not only ensure all employees can handle multiple tasks and roles but also helps them grow professionally. For instance, if you have implemented the best restaurant POS system in Saudi Arabia, train all your employees on how to handle it.

When your employee efficiency improves, there will be an improvement at the organizational level. Simultaneously you can also handle your employees with the restaurant management software in Saudi Arabia.

3. Follow the appropriate salary Structure.

Among other salary structures, the commission-based one brings more joy to the employees.

Why?

Because apart from the fixed salary, the employee will get some brownie points which encourages them to do the job well.

So, we highly recommend having a composite compensatory package for your employees. You can also offer the same for your temporary or part-time workforce in your restaurant.

However, it is equally essential to review your profits and salary structures frequently to avoid paying your employees high than the industry average.

If your business didn’t perform as expected, you might change the salary structure. But before taking that step, explain it to your employees to avoid high employee turnover.

4. Hire part-time help

Hiring a full-time employee is expensive. No doubt about that. But again, as the title claims, you can’t just hire part-time help all the time. You need some trustworthy full-time employees to support your business.

But as a small restaurant owner, hiring part-time employees can benefit in multiple ways. Part-time employees charge hourly, which is lower than a full-time employees. Also, you can offload unskilled and general chores to temporary employees and reduce the overall payroll burden.

So, hiring part-time or seasonal workers can benefit you and if you find them efficient, pull them into a full-time employees. Thus, the part-time employee can help in the cost reduction strategy for restaurants.

5. Invest In Automation, Equipment, And Design

Today, the world is embracing technology in multiple ways to advance. With stiff competition in the restaurant business in Saudi Arabia, it is crucial to implement some advantage tools and software to keep up the game. In fact, restaurant technology is increasingly automating the usual routines. So by automating, you limit the human and labor effort. This saves labor costs.

Also, features such as automatic billing, online ordering, and QR code ordering have cut off the need for human interference.

But what software should you invest in for automation? We recommend investing in the best pos software in Saudi Arabia, such as Postbytz. This software can help you streamline human efforts, automates minor operations, eliminates errors, and lowers restaurant labor costs.

6. Measure and boost employee efficiency

Measuring employee efficiency is a challenging task for a restaurant business owner. You can do it by defining proper roles and goals and setting Key Performance Indicators for each team. And at the end, monitor if they can manage to achieve the goals. But how will you get proper results?

Well, you can track your employee and manage the restaurant business with the restaurant POS system.

If your restaurant business has the best POS system for restaurants in Saudi Arabia, you can quickly get reports about the staff’s performance from the POS software. Thus you can measure and improve the staff’s efficiency. By improving staff efficiency, you can improve productivity. This way, you reduce the restaurant labor cost without any layoffs.

7. Review and schedule

It’s understandable that the restaurant business is dynamic, and it can get affected by certain unpredictable events. So, during hectic times, you must review the customer orders and plan the schedules for your full-time or part-time employees. This will help control the payroll cost, minimize kitchen wastage and also run the restaurant at its best capacity.

Conclusion

As a restaurant business owner handling high restaurant labor costs is not a piece of cake. You need to follow some tips and tactics to control them. So pay close attention to your restaurant business and implement these strategies, and scale up your business.

And as already mentioned, we recommend investing in reliable restaurant pos software in Saudi Arabia that can directly or indirectly help handle your high labor cost.