Labor percentage and Covers Per Labor Hour
This is one of the more imperative knowledge posts that any line cook should know.
Any restaurant still using labor percentage as its ONLY measurement of success is missing half the picture.
I spent years watching leadership get chewed out over a number that had nothing to do with how their team actually performed. Let me show you why.
Labor percent tells you what you spent relative to what you sold.
Covers Per Labor Hour (CPLH) guests served, divided by total labor hours tells you if your team actually worked efficiently.
You need both. Here’s why.
Labor % = Labor cost / Sales
CPLH = Covers served / Hours worked
Same 10 servers. Same 80 hours.
Day 1: 240 covers. CPLH = 3.0. Labor % = 28%.
Day 2: 200 covers. CPLH = 2.5. Labor % = 34%.
Your team worked exactly the same way both days.
Fewer people walked in the door on Day 2. That’s it.
But if you only look at labor %, you’ll blame the manager. Cut the staff. Tank the service on the next busy night. And then wonder why your best people start updating their resumes.
CPLH catches what labor % can’t see:
– Slow Tuesday lunch, bad CPLH? Cut a server.
– Busy Saturday, low CPLH but great labor %? Don’t touch staffing — the checks are just small. Train on upselling instead.
– Sales down 15%? CPLH tells you if it’s a traffic problem or a productivity problem before you touch the schedule.
But don’t throw labor % out with the bathwater. It’s still the only number that tells you if you’re paying too much for the productivity you’ve got.
Great CPLH with a bloated wage scale still bleeds your P&L dry. You can run the tightest floor in town and still go broke if the pay scale’s out of line.
Successful restaurants do not worship one number.
They watch CPLH to know if staffing matches demand.
They watch labor % to know if that staffing is priced right.
Two lenses. One picture.
Managing by percentage alone means chasing ghosts. Managing by CPLH alone means you can run efficient and still go broke.
Know both numbers. Manage to both.
That’s the difference between a manager who reacts and one who actually runs the floor.
References:
– CPLH answers the question of how many guests were served for every hour of labor used, letting operators see whether staffing decisions are actually working instead of just staring at costs after the fact
– CPLH is predictive it shows what’s happening now, before it shows up on the P&L, with an optimal zone for full-service restaurants generally sitting between 2.5 and 5.5
