If you’re running a restaurant or hotel in Oregon, you already know how tough it is. Between rising minimum wages, unpredictable scheduling demands, and ongoing staffing shortages, it can feel like you’re stuck in a spin cycle at the laundromat just trying to keep your labor budget from blowing up without cutting into the guest experience.

But here’s the thing: controlling labor costs doesn’t have to mean slashing hours or running your staff into the ground. The most successful operators I work with aren’t the ones who cut the deepest. They’re the ones who work smarter. And the good news? You don’t need fancy software or a finance degree to get there.

Start by really understanding your numbers. I mean really understanding them…not just glancing at last month’s payroll report. Labor cost isn’t just the wages you pay. It’s taxes, overtime, paid time off, and even that last-minute DoorDash order you made because you were short-staffed and couldn’t spare anyone to run to the store. For restaurants, you’re usually aiming for labor to land somewhere between 25 and 35 percent of sales. For hotels, it can be closer to 30 to 40 percent, depending on how you run your departments.

Once you’ve got a handle on your numbers, the next step is to stop scheduling based on gut instinct. It’s easy to fall into patterns, the same number of people on the floor every Thursday, same housekeeping roster every Saturday, etc., but real control comes from building your schedule around actual demand. If you’re not already using past sales, hotel occupancy, weather patterns, and local events to forecast your labor needs, you’re probably leaving money on the table. The more accurate your forecast, the fewer unnecessary shifts you’ll schedule. Even cutting just a few hours a week adds up to thousands saved over a year.

One thing I always recommend is to invest in your team through cross-training. When someone can jump between roles—say, a host who can expo, or a front desk agent who can support housekeeping, it gives you way more flexibility. You can avoid overstaffing “just in case,” and instead, count on your team to pivot when the unexpected happens (which it always does in this business).

Now let’s talk about overtime. It’s a budget killer. I’m not saying never use it, but you’ve got to keep a close eye on it. Set up alerts, check schedules daily, and make it a practice to redistribute hours before you end up paying time-and-a-half for something that could’ve been planned better. A few hours of OT here and there doesn’t sound like much—until you multiply it by four weeks, then twelve months.

Technology can be a big help here too, and it doesn’t have to be expensive. Things like online scheduling tools, mobile check-in systems for hotels, or handheld POS devices in restaurants can shave hours off your team’s workload. The less time they spend on repetitive, manual tasks, the more time they can spend delivering a great guest experience which is what it’s all about anyway.

One of the most overlooked strategies for managing labor cost is retention. Turnover is expensive. Training a new restaurant hire can cost thousands, and hotels are even worse. Every time someone walks out the door, you're not just losing a team member, you’re losing the investment you made in them. The more you invest in making your workplace one that your team wants to stay in, the less you’ll spend constantly replacing staff.

Finally, make labor management a part of your daily routine. It should not be something you scramble to review at the end of the month. Check in with your schedules, your team, and your managers daily, see what went right, what didn’t. Were you overstaffed? Did someone clock in early for no reason? Were you slammed and understaffed? Adjust daily and weekly, not monthly or quarterly. The faster you react, the less likely small problems become big budget headaches.

At the end of the day, controlling labor costs isn’t about cutting corners. It’s about creating a system that supports your business, your team, and your guests. It’s about using what you already have…your data, your people, your instincts, and making smarter choices with them.

Because in this business, working smarter is working harder. And a well-managed labor budget doesn’t just save you money, it saves your sanity. | Ken Henson, Refettorio Consulting