Sales per Employee

Many restaurants use SPLH - Sales per Labor Hour - or something similar to measure
productivity. SPLH measures how many sales dollars are generated for each hour an
employee is clocked in. It's a quick and easy tool to help managers see how productive
their staff is, but it varies by location, chain, daypart, and so on.

While I am a proponent of using SPLH as one of the measurement terms, perhaps a wider
net must be cast. Other businesses commonly measure sales per employee --- how much
money is generated in sales per employee on an annual basis. In its simplest form, if a
restaurant does $1 million dollars in sales and has 20 employees, the sales per employee is
$50,000 per year. Sounds pretty impressive, doesn’t it?

Research has shown a restaurant will be in the $40,000-$60,000 range. Other industries,
however, are far higher --- often five to ten times higher! That means the industry is labor
intensive, and it must continue to generate more sales and profits to remain competitive as
an industry.

To that end, what are you doing to improve your sales per employee? Here are a few
suggestions:

- Work on building the check average through a variety of means: price increases
where warranted, bundling, eliminating low-cost items, building catering and togo/
off-premise sales, suggestive selling, training, and so on.

- Use technology to improve labor productivity and sales-building opportunities.
Evaluate everything: POS software, kitchen productivity/analysis, self-service
kiosks, online ordering, and so on.

- Eliminate menu items that are very labor intensive or low-sales items.

- Outsource some preparation or production steps to minimize the need for prep
labor.

- Minimize the need for labor during non-peak times or build business during
slower periods.

Keep in mind that, when employees are paid hourly, they would prefer lower sales per
hour, because it's less work for them. Turn your employees into salespeople by developing
an incentive-laden pay system where they want it to be busy. After all, if it's busy and they
have an opportunity to earn more, that's a much better alternative than them wanting it to
be slow and get paid the same amount.

Sales per employee...What’s yours today? Where should it be? Get productive now!

T.J. Schier is service professional, consultant and speaker with over 20 years experience in operations and training. Founder and president of Incentivize Solutions and podTraining, T.J. has helped numerous clients enhance their service and training programs and spoken to tens of thousands of managers, franchisees and operators in various fields. Visit http://IncentivizeSolutions.com/ for more info motivating today's employees, training today's generation and delivering outstanding guest service; or http://podTraining.us/, a unique new system and the foundation of 'i-learning' - using the device of today's generation, the iPod - to train your workforce.

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By T.J. Schier