Why Labor Percentage Doesn’t Tell You How Many Hours to Schedule
You've probably heard this advice: "Keep labor under 30%."
Or maybe your number is 28%. Or 33%. Whatever it is, you track it. You watch the weekly reports. You know when you're over and when you're under.
But when you sit down on Sunday afternoon to write the schedule, that number doesn’t help you at all.
When you sit down to write next week's schedule, "30%" doesn't answer the question that matters: How many hours should I put on Tuesday?
The Difference Between Tracking and Planning
A labor percentage is a trailing indicator. You calculate it after payroll runs. Sales divided by labor cost. Simple math.
By then, the hours are worked. The shifts are done. The cash has already left your bank account.
Tracking labor percentage tells you how you did. It doesn't tell you what to do.
The Sunday Afternoon Problem
Here's what actually happens when most operators build a schedule:
You look at what you scheduled last week
You think about what's coming up (any events? expected busy days?)
You make adjustments based on gut feel
You add a little cushion here and there, just in case
You total up the hours and hope it lands somewhere reasonable
Then you wait until payroll runs to find out if you were right.
By then, the decision is irreversible.
What Would Actually Help
Instead of a percentage to aim for, what if you had a number before you wrote the schedule?
Not "target 30% labor." But: "Tuesday needs 48 hours."
That's a different kind of tool. It's forward-looking instead of backward-looking. It tells you what to schedule, not how to judge what you scheduled.
The math to get there isn't complicated. It's based on the relationship between your sales and the labor required to produce those sales—specific to your menu, your service style, your operation.
But most operators have never derived that number. So they keep guessing.
The Cost of Guessing
When you're guessing, you tend to guess high. An extra hour here, a cushion there. Better to be safe than sorry.
But those extra hours add up. A few hours a day, every day, every week. At $15-20/hour fully loaded, that's real cash walking out the door.
None of these hours feel wrong in the moment. That’s why the cost hides so well.
Not because you're careless. Because you don't have a number.
The Bottom Line
Labor percentage is useful for looking backward. But it won't tell you what to schedule.
If you want to stop guessing, you need a number that works forward—one that converts your projected sales into target labor hours before the week starts.
That’s the difference between tracking your labor — and actually controlling the cash it commits.
Kwan Howard helps independent restaurant operators stop leaking cash — and make better weekly decisions about labor, scheduling, and operations.
Download the free guide: Before the Schedule: The Cash Cost of Guessing
