[00:00:01] Everyone's talking about labor right now. Labor shortages, labor costs, labor inflation, labor problems. And see, most restaurant owners have come to the same conclusion. Well, I guess this is just the new normal. That's what they say, throwing their shoulders up in the air. But let me be very clear, labor is not broken. The way most restaurants are designed is because well run restaurants are not drowning in labor chaos right now. They are operating with intention. Today on Restaurant Strategy, I want to show you why labor might feel out of control in your restaurant. And most importantly, I want to show you what actually fixes it.
[00:00:37] There's an old saying that goes something like this. You'll only find three kinds of people in the world. Those who see, those who will never see, and those who can see when shown. This is Restaurant Strategy, a podcast with answers for anyone who's looking.
[00:01:08] Hey everyone, thanks for tuning in. My name is Chip Close. This is Restaurant Strategy Podcast. Two episodes every single week where we help you level up. We help independent restaurant owners make more and work less. I give talks, I write books. I've got a membership site. I put out free content here. Two podcast episodes every day. I'm on YouTube, TikTok, Instagram, everywhere you can find me. But I also run a paid service. I run a group coaching program called the P3 mastermind. If you have been consuming my free content for any period of time and you are not seeing the changes you want to see, then that's when you get in touch. RestaurantStrategyPodcast.com Schedule It's a free phone call with me or someone from my team where we get to ask each other a bunch of questions to see if we're a good fit. We can help turn things around in six months or less. I promise you, we've done it hundreds of times already. I would love to do it again again. RestaurantStrategyPodcast.com Schedule as always, you'll find that link in the show notes.
[00:02:07] Now, if you've been listening to the show for any length of time, you have heard me talk about Kickfin. Because they've been a trusted partner of mine for years and I genuinely believe in what they do. For restaurant operators, see, managing tips has always been a headache. There's never enough cash in the drawer. At the end of the night, managers are stuck making bank runs and, you know, doing spreadsheet math. At 1:00am Tip pooling regulations keep getting more complex. It's just not fun.
[00:02:34] That's exactly why Kickfin exists. With Kickfin, restaurants can calculate tip pools automatically and send instant payouts directly to employees existing bank accounts. So no cash, no predatory pay cards, no glitchy employee apps required. Your team gets paid their tips fast in the account that they choose right when their shift ends. Kickfin integrates with all the major POS players, Toast Square, skytab, Genius Union, and many more. So you get fully automated end to end tip management. It's fast, it's accurate, and it gives you a clean digital record for accounting and compliance. Kickfin powers tip payouts for every type of concept from mom and pop shops to regional hospitality groups to national brands like Walk On Sports, Bistro, Marco's Pizza and Toasted Yolk Cafe. Great hospitality starts behind the scenes when your people feel valued, when they are paid fairly, paid fast. I promise everything improves. Kickfin makes that possible. If you're ready to save hours every week, eliminate cash runs, streamline accounting and make tip payouts the best part of everyone's day, visit kickfin.com demo and yes, you'll find that link in the show Notes now, labor problems are a symptom, not the Disease See, most owners talk about labor as if it's some external force, right? Well, the market is tight or people don't want to work or wages are killing us. But here is the uncomfortable, inconvenient truth. If labor is always out of control in your restaurant, it has nothing to do with the market. It's because your systems are demanding too much from your people.
[00:04:21] See, labor problems are a design failure, not a people failure.
[00:04:27] Most scheduling is driven by fear, not strategy. So let's talk for a minute about how most schedules get built. They get built not from data, not from standards, but from anxiety. You know, people overstaff and they say, oh well, what if we get slammed? What if someone calls out? I mean, what if Friday is crazy?
[00:04:45] So owners overstaffed and every shift becomes an insurance policy. And insurance policies are fine, but they're expensive.
[00:04:54] See, overstaffing does not create safety, it creates complacency. I have seen that over and over and over again. It also cuts into profits and makes an unsustainable business.
[00:05:07] See, what happens is that people slow down and roles blur and accountability disappears and labor percentage quietly creeps up week after week after week after week.
[00:05:19] Labor is controlled upstream, not on the floor. See, here's the shift that most owners never actually make. Labor doesn't get fixed on the schedule. It gets fixed before the schedule is even written. See, labor is determined by menu size and complexity, prep systems and batch size, station design, station flow, training expectations and volume predictability Meaning, if your menu is bloated, labor expands. If your prep is inefficient, labor expands. If your stations are unclear, fuzzy. If the roles are unclear, labor expands. See, labor always grows to absorb chaos. So when you cut down on the chaos, you cut down on the labor so that everybody there is working more effectively, more efficiently, and they're actually getting the job done.
[00:06:13] Unclear roles create long shifts, and they actually create burnout. See, one of the biggest labor drains in restaurants is ambiguity. When no one knows who owns what or what done looks like or when they're allowed to leave, people just stay late, just in case and for a while. That feels like teamwork, right? It feels supportive, it feels responsible.
[00:06:36] But it's also. And I know you know this, but it's also incredibly expensive.
[00:06:41] Clear roles shorten shifts. Vague roles extend them. And extended shifts don't build culture, they build resentment. It's crazy, right, that we're trying to staff up to make sure everybody has a smoother shift. But in front of house, when we staff up, it means people make less money. When we staff up, it means that we've got more people than we actually need. It means that a lot of people are doing tasks right, rather than running lean. When we run lean, everybody comes in, knows exactly what they need to do in order to get ready for the shift. And over the course of the shift, teamwork has to happen. I worked at a restaurant in midtown years ago, and they purposely ran with, like, too few people, so they should have probably run with 11 or 12 servers on the floor, and they ran with nine or 10. And it was insane. It was always really uncomfortable. But it had the best teamwork of any place I've ever worked at.
[00:07:32] See, what happens is when everybody's just got some, like, hanging around time, right? They start thinking about where they'd rather be. When they got hanging around time, they realize that they're not making as much money as they could, right? Their sections aren't as full as they would like them.
[00:07:46] And again, that's what builds resentment.
[00:07:50] Hero culture is destroying your labor model. See, many restaurants survive on heroes. Maybe you are one of them, meaning the server who always stays late, or the cook who can always work an extra station, or the manager who just puts out all the fires, fixes everything, or the owner who plugs all the holes and will pick up the phone no matter what hour of the day.
[00:08:13] Many restaurants survive on heroes, and it feels impressive, it feels loyal, it feels necessary, but it's also incredibly fragile. It makes your restaurant fragile because Heroes burn out, heroes leave. Heroes can also hold the system hostage. So if your labor model depends on heroics, it's not a model, it's a gamble. You need a system that will work when you put average people in, not heroes. Heroes can make it work no matter what. But you need systems that will let average people come in and crush and will excel at the job.
[00:08:53] Anything less truly is just a gamble.
[00:08:58] Ajinomoto is your answer to every busy dinner rush spent deep in the weeds. When hungry customers walk through the door, they expect good food, right? Good food that tastes homemade. But making every dish from scratch cuts into your profit, especially with the cost of ingredients and labor these days. That's where Ajinomoto Foods comes in. Ajinimoto has a huge catalog of fast food, easy to prep frozen Asian products that taste and look homemade. That includes classics like fried rice dumplings and onion rings and new trendy fusion plates like kimchi chicken pot stickers. Choosing Ajinimoto is choosing over 100 years of proven expertise in the food service space.
[00:09:40] Choose to save time. Choose to save money in your busy kitchen without compromising on the quality your customers expect.
[00:09:48] Learn about
[email protected] and yes, you're gonna find that link in the show Notes here's the deal. Labor is not a cost to minimize.
[00:10:00] Rather, it's a system that you design.
[00:10:04] And this is where the real paradigm has to shift. Labor is not just about cutting right. Labor is something you engineer well. Designed labor feels predictable. It scales with volume. It reduces stress. And guess what? It supports consistency.
[00:10:21] Poorly designed labor feels chaotic. It swings wildly. Yes, it eats profit. And yes, it exhausts leadership. Even you.
[00:10:31] When labor is designed well, you stop fighting it and just get to start managing it. So that's why just scheduling tighter never works. Or, well, we'll just cut when it slows down.
[00:10:43] It doesn't work because owners try to solve labor by just squeezing. They cut an hour here, they cut an hour there. They send someone home early. They run leaner on a Thursday night when they probably should have staffed up.
[00:10:56] That doesn't fix labor. It just transfers stress. Because eventually service slips. Eventually mistakes increase and managers panic. Eventually the owners have to jump back in to save the day with their cape. And because they're the heroes.
[00:11:13] And you feel how the cycle resets, right? Labor problems solved at the surface always come back.
[00:11:21] So here's the real reframe. Here it is. Labor behaves when systems are clear. Labor explodes. Labor becomes chaotic when systems are vague.
[00:11:32] Most restaurants don't have a labor problem. They simply have a design problem.
[00:11:38] This came up the other day in one of the P3 mastermind sessions. I was sharing a story. I've shared this story before. Shared the story about how this. This restaurant I was working@ in 2022 cut pastry cooks at dinner. It sounds crazy, right? Michelin star restaurant cut pastry cooks for dinner service. And what happened is that they realized that most of the desserts just had to be constructed. The hard work happened in the day when people were making twills and baking things off and making ice creams. That was the real skilled labor was required. So what they did is because pastry was right next to garde manger, they had the folks working the cold line just plate the desserts. So pastry cooks are there during the day.
[00:12:19] They prepped everything, and then the garde manger cooks just had to construct things in the night. What happened is they slimmed down the items that came off the cold line, and they streamlined the desserts. Now, over the course of the year, yes, we did the math. It saved them over $180,000 thousand dollars in labor. Cutting two nighttime pastry cooks seven nights a week saved almost $180,000 in labor over the course of the year. It was insane. The best part was that they were able to reinvest that money in key players, right? In chefs, in sous chefs, in lead line cooks. And. And guess what? Because they had to cut down the dessert menu, they actually sold more desserts. They end up increasing, check average, increasing the percentage of desserts sold.
[00:13:08] And because the guys on Gar Manger had extra to do, we didn't have that downtime. There was no blurry lines. They just like, they always had to do the next thing. The next thing, next thing. It passed the shifts faster. We were able to pay them a little bit more. I watched it in real time. And to be clear, I didn't make this recommendation. This came out of the data we ran, the reports we ran.
[00:13:30] But the executive chef owner made the decision, did not. This did not go over well with pastry chef. But eventually they relinquished control of this decision.
[00:13:41] And so it was about the design.
[00:13:43] I was asking clients the other day. I was asking members, I said, what do you do for. Do you guys do a winter menu? They said, what do you mean, a winter menu? I said, well, revenue dips down in January, February. We're down 20, 25% from where we were in November and December. So because revenue dips down, we have to dip, you know, cut down our labor. So how do you do it responsibly and it comes through the design of the menu. Coming up with things that need less prep, coming up with items in the menu that can be picked up more easily. So instead of running the line with five, we can easily run with four certain nights, three, because they're easier on the pickup. We're not going to screw it up. We're not going to overcook something leaving in a pan, right? That's where you get short ribs, things like that, braised items, because they're really easy on the pickup. You're not going to screw them up.
[00:14:30] It's in the design, it's not in the execution. You fix the design and the labor will follow.
[00:14:37] So here's the deal. Your action this week, ask this question honestly of yourself.
[00:14:42] Where are we using people to solve system problems?
[00:14:47] Where are extra hands compensating for poor prep design or bad kitchen layout? Or, you know, overstuffed menus or weak training or unclear standards?
[00:14:59] Where are we using people to solve system problems? Fix the system and the labor will settle, I promise. Here's the bottom line. Labor isn't out of control because people are unreliable. It's out of control because the restaurant is asking humans to compensate for bad design.
[00:15:19] And that's it. Guys, as always, I appreciate you making this show part of your week. If you get any sort of value from it, please consider leav us a five star rating and review on Apple podcasts. That more than anything helps us grow this, this little thing. And listen, pass it along if this resonates with you. If you think somebody else would get something from this episode, simply hit share, send it to somebody and have them listen to it. It's not that long, right? You can listen for 15, 16 minutes and learn something new. Go do that. Take steps to fix the design of your restaurant. Don't just keep cutting, cutting, cutting. That's not how you fix labor. That's it, guys. Thank you very much again. My name is Chip Close. I'm the founder and CEO of Restaurant Strategy and I am your host. I appreciate it. I will see you next time.
