Labor Costs
Myth: “Restaurants don’t have high labor costs. Servers earn wages through tips, which are paid by the consumer.”
Reality: While individual hourly wages for restaurant workers may seem low, labor costs can still represent a significant percentage of a restaurant’s overall expenses, around 30%.
This can be attributed to several factors:
- The restaurant industry is notorious for high turnover rates, around 75%! Every time an employee leaves a restaurant, the operator has to invest time, money, and resources in finding and training a new person.
- While servers are compensated through tips–yes, paid by the consumer–there are many other roles needed to run a restaurant that may not be included in the tip pool: kitchen staff,…
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