Rising Labor Costs Drive New Thinking for Restaurants

The restaurant sector is competitive. Changing customer behavior and the relative ease of new entrants drive a flurry of activity intent on improving competitive positioning.And then there’s the cost of labor. 

Record low unemployment, industry annual turnover rates exceeding 120 percent, and rapidly increasing statutory wage rates are changing store economics at a breakneck pace. To keep stores in the black, achieve corporate financial objectives and keep franchisees in business, restaurants have no choice but to dig deep into their cost structures. Restaurant executives are finding that the success of keeping growth initiatives funded and their own professional trajectories intact is now closely tied to their ability to navigate the changing labor environment.

What can restaurant executives do to counter rising labor costs? 

This new dynamic can be challenging for leaders. With greater visibility within organizations and higher levels of scrutiny, the pressure to right…