PRINCIPLES OF FOOD, BEVERAGE, AND LABOR COST CONTROLS

504 � CHAPTER 18 LABOR COST CONSIDERATIONS
Outsourcing
a smaller package of employee benefits — an additional 10 percent. If it is
possible to keep four full - time cooks to cover 20 shifts, and to hire part - time
cooks to cover the remaining 15 shifts, the new labor cost will be calculated
as follows:
Full - time cooks
Wages: 4 cooks � 35 hours � $15 per hour � $2,100
Benefits:
$2,100 � 20 � 420
Part - time cooks
Wages: 15 shifts � 7 hours � $10 per hour � $1,050
Benefits:
$1,050 � 10% � $ 105
New total labor cost � $3,675
Thus, it would be possible for the manager of the Circle Diner to reduce
labor cost from $4,410 to $3,675 (16.7 percent) by reducing the number of
full - time cooks from seven to four and hiring part - time cooks at lower hourly
wages to cover the 105 hours previously covered by full - time cooks. If, in the
manager ’ s judgment, part - time cooks are able to produce work equal to that
of full - time cooks, there are likely to be some staffing changes in the Circle
Diner. In the foodservice industry today, many managers are hiring growing
numbers of part - time employees to keep labor costs lower than they would
be if all work were done by full - time personnel. Thus, the use of part - time
staff is another determinant of labor cost.
O u t s o u rc i n g is arranging to have work done on a contract basis by outside
organizations rather than by full - time employees. It can also affect labor cost.
Some establishments, for example, no longer rely on full - time employees to
clean the premises at night, after the close of business. Instead, the owners
and managers have engaged firms that contract to perform night cleaning
services for a fixed amount per month. Similarly, many foodservice organizations
now use contract services to calculate payrolls and prepare paychecks,
rather than have the work done by their own employees. Others no longer
employ skilled kitchen personnel to prepare such items as baked goods, desserts,
and ice carvings. Still others are purchasing frozen, portioned entr é es,
rather than hiring high - cost chefs. Many are finding it less costly to rely on
outside contractors for various goods and services that were commonly