4 Metrics Every Restaurant Should Be Tracking

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A recent study by the National Restaurant Association found, one in three of quick-service openings and one in four fast-casual job openings go to people getting their first work experience in hospitality. Anyone who’s worked in the foodservice industry knows that employees are the lifeblood of customer satisfaction and repeat business, but lack of experience can negatively impact your business.

You may be running a well-structured training program for new staff in the hopes that they’ll learn quickly and become more productive, but you might be missing a critical piece in your evaluation of staff growth – the impact new staff are having on sales and profitability.

There are four key metrics restaurants need to keep track of when on-boarding new staff to evaluate their impact on operating profit.

1. Sales per labor hour

Understanding the sales per labor hour metric and calculation is important if you want to increase productivity and maximize profits. 

What is sales per labor hour?

Sales per labor hour is a way of measuring the productivity of your staff. It’s an analysis that takes into account revenue earned and labor hours recorded. Analysis of your sales per labor hour can help you determine if you are getting a good return on the investment in your staff. 

According to the NRA, for limited-service restaurants, the median total sales per full-time equivalent employee is $45.33 per hour ($68,571 per year). The sales per labor hour metric gives you insight into the productivity of your staff. Is your staff reaching $45 per hour in sales?

How do you calculate sales per labor hour?

To calculate sales per labor hour, you divide the total amount of revenue earned by the number of labor hours worked by all employees. Sales per labor hour is also referred to as sales per employee hour, and it enables you to make adjustment to hit your target profits. It will also help you determine if you’ve budgeted too much for labor. You may need to cut the number of employees to maximize profitability. Knowing your average restaurant sales can also be helpful. Be sure to make a frequent analysis of every metric to ensure you’re measuring all you need to have the most success.

What’s the best way to track sales per hour?

The best way to track the metric of sales per labor hour is through a cloud-based restaurant management system. Having a single platform to manage this data that integrates with your POS is the first step to improving your sales per labor hour. Then you’ll be able to see as you teach and nurture new staff your sales per labor hour will rise during their shifts.

2. Average cover

Table service restaurants need to track a slightly different measurement – average cover, which measures how effective each employee is at maximizing sales for each table in their section, as one server may have a bigger section than another server. The easiest way to measure this is through a cloud-based system that integrates with your POS. You’ll start to see the best servers sell more to each person and average cover accurately measures this.

3. Up-selling

One of the key reasons new staff may not meet their sales targets is that they are not up-selling. Good training on the menu and specific descriptions of key items is important. You need to maximize selling time when there is a guest in the seat, and tracking up-selling by employee will identify the servers leaving dollars on the table.

4. Food costs

For limited service restaurants, new staff can have a huge impact on cost of goods sold. Many restaurants lose profit from new cooks due to incorrect portioning, waste, and unrecorded sales. A daily prime cost report measures these problems and identifies the root cause of an issue quickly. You can identify shifts where waste is higher than average or food cost for a particular item is above the norm. Armed with this intel you can start asking your managers the right questions.

Once you’ve identified an issue in your operations, you can start fixing it with new training programs or specific one-on-one training. The hardest part is actually tracking the metrics. Modern back-office software gives managers access to these metrics on their mobile devices in an easy-to-use format. Data can be pulled from multiple POS platforms and updated in real-time via the cloud, so you always have accurate, current analysis at your fingertips to measure and manage staff productivity.

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Leverage Technology to Manage Restaurant Labor Costs

Between increased costs, labor shortages, and socio-economic complexities - staying on top of labor costs is more important than ever for franchise owners.

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