There are several costs that can drain profits but not many are as significant to bottom line or as difficult to control as labor. When costs begin to climb, anxiety levels rise and often lead to knee jerk reactions that might include reducing employee pay, and cutting the amount of workers or hours worked.While any of these may produce cost reductions, none are the right path to solving labor cost issues and may have a negative impact on the quality of service.
Another thought to consider is the changes that come with the Affordable Care Act, mandatory pay increases and proposed changes to the overtime rules to name a few. You can start to see why most restaurant operators list labor costs among their top concerns, it's no wonder many lose sleep over it.