Labor Cost Case Study

Labor costs enter into two categories: fixed costs and variable costs. Fixed costs refer to salaries of core staff or permanent staff and variable costs to hourly or casual staff. Labor costs are the highest costs in food and beverages operations. On the other hand food costs are said variable costs. Thus controlling labor costs is fundamental in increasing revenue. Also the reduction of food cost will add revenue and make business more sustainable.

Since labor and food cost costs are far above industry average we’ll propose long term solutions to reduce them.

2.1 Labor cost

The control of labor costs starts with the hiring process and we may refer to the task 1 to prepare it. We might also think about training programs also treated in task 1.Then the following solutions may be implemented:

2.1.1 Cooking Methods

The use of some cooking techniques such like Chilled Pasteurized

The main principle is, from the mise-en-place, to cook first at a temperature (82°C) above the pasteurization temperature (72°C), fill and double-seal the liquid or semi-liquid in a dedicated plastic bag then rapidly chill through the danger zone (5-60°C) and finally store the product at low temperature (0-2°C). This method of production allows storing the product over a period of 14 days. The benefits in term of labor costs savings is a reduction up to 90% since it avoids cooking liquid or semi-liquid food every day hence reducing work to be done. Even unskilled staff could just open the plastic bag and reheat the liquid without any supervision.

Sous-Vide: brings another alternative of extending shelf life product as in the hot fill process. The product is first packaged under vacuum before using the same cooking, chilling and storing process described above. Again non skilled staff can serve pre-prepared sous-vide food. Product should not be fragile and