or Connect
ChefTalk.com › ChefTalk Cooking Forums › Professional Food Service › Professional Chefs › Salary/labor cost question
New Posts  All Forums:Forum Nav:

Salary/labor cost question

post #1 of 20
Thread Starter 
How common is it for salaried employees to be included in the kitchen labor cost? My chef isn't (I'm the sous) but I am. Not only that, but it's figured in on a daily business, even my days off... seems odd to me. It's a smaller place, and the chef didn't have a sous for several months before I started. But we are very seasonal, and it seems to be hurting us currently. Any way, any input appreciated.
post #2 of 20

Who is responsible for coming up with the budget and who is paying attention to it? Are they aware that budgets are tools but also just pieces of paper?

 

If the money being spent on salaries is recorded under kitchen labor or under another category it doesn't really change the bottom line of the business. Either way the same amount is being spent and the profit or loss remains the same. If the powers that be don't understand this concept, it can definitely complicate things quickly.

Wisdom comes with age, but sometimes age comes alone.
Reply
Wisdom comes with age, but sometimes age comes alone.
Reply
post #3 of 20
Thread Starter 
I'm not sure who actually writes the budget, we get 21% between front & back, not counting the chef or FOH managers. Chef writes the kitchen schedule, we are supposed to hit 12.5%.
Just out of curiosity, can you elaborate a little more on the differences for me? It's not my first sous job, but I've never seen it done like this.
post #4 of 20

If it were set up differently, your target number would also be different, so it basically wouldn't be different at all, if that makes any sense at all.

 

If your salary was recorded under the same category as the chef's, then your salary would be backed out of the kitchen budget so correspondingly your target labor cost for the kitchen would be lowered proportionally to reflect that fact and the target number for the salaries category would be increased proportionally to reflect that fact.

 

It is basically six of one and a half dozen of another, just pray that the people at the top understand that. Whether the numbers are reasonable or not is a whole nother story and hard to say without seeing the full budget and p&l statement.

Wisdom comes with age, but sometimes age comes alone.
Reply
Wisdom comes with age, but sometimes age comes alone.
Reply
post #5 of 20
Thread Starter 
Well, the fact that the labor budget hasn't changed from before I worked there more or less answers my question... it felt "awkward" for some reason, and now I think i see why.
post #6 of 20

I personally wouldn't include your salary into my kitchen labor cost budget if I were setting up the financial charts because your salary is more or less a fixed cost.

 

By doing so I reduce the effectiveness of tracking the labor cost as a tool to help me with scheduling etc because it is not a true reflection of costs that I can control. You get paid, work or not, low hours or long hours.

 

To me it does not make sense but it really doesn't matter either way to the actual bottom line. I just get to use a tool with diminished effectiveness in to helping me to make decisions concerning running the business. Kind of like a dull knife...WHY????

Wisdom comes with age, but sometimes age comes alone.
Reply
Wisdom comes with age, but sometimes age comes alone.
Reply
post #7 of 20
It is a labor cost. Include it. The more accurate you track costs the better you can control them. They are just hiding the chefs salary from you. There is a higher up mgt labor cost that includes it. Or they don't know what their cost are. The accountants will have their own cost controls as well as labor tracking. Someone pays the salaries and the money comes from food sold....
post #8 of 20
Quote:
Originally Posted by chefboyOG View Post

It is a labor cost. Include it. The more accurate you track costs the better you can control them.

How do you control a fixed cost? Yes it is beyond important to track cost.

 

Rent/mortgage is a good example of a cost that needs to be tracked, but at the same time it is a fixed cost and won't change so thereby can't be controlled.

 

Salaries fall into the same definition of fixed cost so if you lump them into your labor cost with hourly pay rates (which you can control by cutting back hours, number of employees working at one time, etc) then your feedback received from your spreadsheet will be skewed and not a good representation of cost that you can control or impact.

Wisdom comes with age, but sometimes age comes alone.
Reply
Wisdom comes with age, but sometimes age comes alone.
Reply
post #9 of 20
Well its not necessarily about control but information. And yes if labor is out of " control" cut hourly first. Chefs arent a capital cost they can be let go much faster then rent and adjusted. Yoh can always move locations as well, but if your accounting info isnt giving you proper info, its going to be harder to make that decision.

Lets just say I see the salaries in my labor cost reports. They put them us in Monday to Friday daytime, regardless what we work! Bad accounting IMO the hours should be costed when accrued as to not skew the rest if the data.

Just saying you can cut salaries just as well as any other form of pay. It all affects the bottom line.
post #10 of 20

Cutting a salary usually comes with budgetary repercussions that increase other segments of a spreadsheet such as hourly.

 

To me it is more beneficial to view salaries as a fixed cost even though they can be cut, adjusted, or eliminated, whatever and yes it will effect the bottom line, but for the most part salaries should stay fairly consistent over a time period such as a month or week or day. So as to scheduling or whatever there isn't much I can do that will impact salaries contribution, hourly on the other can be adjusted, jockeyed, fine tuned, tweaked enough to where their impact is easily felt.

Quote:
Originally Posted by chefboyOG View Post

 Bad accounting IMO the hours should be costed when accrued as to not skew the rest if the data.

Just saying you can cut salaries just as well as any other form of pay. It all affects the bottom line.

How would you go about cost/accrue a salary position. Would you do it on a hourly rate? What if the salaried position works 12 hours one day and then 16 hours the next? Not really going to work too well that way. How about a daily rate? Except one week they work 5 days and then the next week they work 7 days. Problems there as well. That is why salaries are usually inputted M_F day times. Do I agree with it as an accounting practise, no; and yes it skews the rest of the data. That is exactly why I prefer not to lump them into labor.

 

FWIW, you can cut paying rent and yes it will effect your bottom line :peace: 


Edited by cheflayne - 10/29/14 at 10:10am
Wisdom comes with age, but sometimes age comes alone.
Reply
Wisdom comes with age, but sometimes age comes alone.
Reply
post #11 of 20
ow would you go about cost/accrue a salary position. Would you do it on a hourly rate?

Yes.
post #12 of 20

Lets say your salaried position is paid $50,000 on a yearly basis. One day they work 12 hours. One day they work 16 hours. How would the break down to an hourly rate go?

Wisdom comes with age, but sometimes age comes alone.
Reply
Wisdom comes with age, but sometimes age comes alone.
Reply
post #13 of 20
I think put them in for the first 40.
They want to work for free the rest of the week....

In my position thankfully I don't have to worry about it being that sporadic hour wise. A lkt of Chefs dont like to track their hours for the obvious reasons hat if they are putting in 60 hrs a week their hourly pay gets slashed.

Just the wag it is at my place of work, not trying to reinvent GAAP here.
post #14 of 20
Quote:
Originally Posted by chefboyOG View Post

I think put them in for the first 40.
They want to work for free the rest of the week....

But then wouldn't that be like

 

Quote:
Originally Posted by chefboyOG View Post

They put them us in Monday to Friday daytime, regardless what we work! Bad accounting IMO the hours should be costed when accrued as to not skew the rest if the data.

 
Wisdom comes with age, but sometimes age comes alone.
Reply
Wisdom comes with age, but sometimes age comes alone.
Reply
post #15 of 20
Quote:
Originally Posted by cheflayne View Post

Lets say your salaried position is paid $50,000 on a yearly basis. One day they work 12 hours. One day they work 16 hours. How would the break down to an hourly rate go?
Well I'll take a stab at this I guess.
50 k is 24/ hr
Chef clocks in at 6 am 24 goes into that hours wage cost x 12 hrs until 6 pm= 288 for the day. Same is done for all employees BOH. 2 cooks that day? 8 hrs each@ 12$ 16x12= 192$ + 288= 480. Sales were 2,000. 480 hrs/ 2,000$ = .24 or 24%. Don't forget to add stewards on top of that.
This is all in spreadsheet and shows exactly the budget and actual sales. This is important the budget must be realistic.
post #16 of 20
I don't understand that one Cheflayne, sorry. My logic is probably broken just trying to help.
Quote:
Originally Posted by cheflayne View Post

But then wouldn't that be like
post #17 of 20
Thread Starter 
So, here's the problem: My pay is figured into the hourly kitchen labor cost AFTER the day is over,seven days a week. So, my chef pulls a report on wednesday and sees he is running twelve percent, after everything is reconciled, on a slow day (it's our off season) that could go up by a point or two even though i didn't work
post #18 of 20
Grande that is exactly the problem I have with over simplifying labor costs.

If you only count end of month numbers and do not micro manage at all it may be ok to spread salary over the whole week: month / year. Just dont cherry pick numbers that are not real. I.e GM calls kitchen office mad, why labor so high bla bla cut someone...... Oh maybe cause your paying the chef who isnt here at the moment and its tuesday afternoon.....
post #19 of 20
Thread Starter 
The system actually overcomplicates it, to my mind, because instead of accounting for me as a set price, I have to be worked into the labor after... which means I don't actually know what labor cost I need to run until its too late; my budget might look good, but if we get a slow day my labor kills it
post #20 of 20
Sales fix all accounting problems smile.gif
Slow days happen. EOM it needs to work out.
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: Professional Chefs
ChefTalk.com › ChefTalk Cooking Forums › Professional Food Service › Professional Chefs › Salary/labor cost question