Chapter 7 - Managing the cost of labor. This chapter presents the following content: Labor expense in the hospitality industry, evaluating labor productivity, maintaining a productive workforce, measuring current labor productivity, managing payroll costs, reducing labor-related costs, technology tools. | Chapter 7 Managing the Cost of Labor 1 Main Ideas Labor Expense in the Hospitality Industry Evaluating Labor Productivity Maintaining a Productive Workforce Measuring Current Labor Productivity Managing Payroll Costs Reducing Labor-Related Costs Technology Tools 2 Labor Expense in the Hospitality Industry In today’s market, the cost of labor is increasing rapidly. As a result, managers must take specific steps to control labor costs and stay within labor budgets. In some foodservice establishments, the cost of labor actually exceeds the cost of food and beverage products. 3 Labor Expense in the Hospitality Industry When labor costs are adequately controlled, management has the funds necessary to create desirable working conditions and pay a wage that will attract the very best employees. In every service industry, better employees mean better guest service and, ultimately, better business profits. 4 Labor Expense in the Hospitality Industry Payroll is the term used to refer to the salaries and wages paid to employees. Labor expense includes salaries and wages, but it consists of other labor-related costs as well. 5 Labor Expense in the Hospitality Industry Labor expense includes: FICA (Social Security) taxes, including taxes due on employees’ tip income FUTA (Federal unemployment taxes) state unemployment taxes Workers’ compensation Group life insurance 6 Labor Expense in the Hospitality Industry Labor expense includes: (cont.) Employee health insurance Pension/retirement plan payments Employee meals costs Employee training expenses Employee transportation costs 7 Labor Expense in the Hospitality Industry Labor expense includes: (cont.) Employee uniforms, housing, and other benefits Vacation/sick leave/personal days Tuition reimbursement programs Employee incentives and bonuses 8 Labor Expense in the Hospitality Industry A salaried employee receives the same income per week or month regardless of the number of hours worked. Exempt employees, because their duties, . | Chapter 7 Managing the Cost of Labor 1 Main Ideas Labor Expense in the Hospitality Industry Evaluating Labor Productivity Maintaining a Productive Workforce Measuring Current Labor Productivity Managing Payroll Costs Reducing Labor-Related Costs Technology Tools 2 Labor Expense in the Hospitality Industry In today’s market, the cost of labor is increasing rapidly. As a result, managers must take specific steps to control labor costs and stay within labor budgets. In some foodservice establishments, the cost of labor actually exceeds the cost of food and beverage products. 3 Labor Expense in the Hospitality Industry When labor costs are adequately controlled, management has the funds necessary to create desirable working conditions and pay a wage that will attract the very best employees. In every service industry, better employees mean better guest service and, ultimately, better business profits. 4 Labor Expense in the Hospitality Industry Payroll is the term used to refer to the .
