Kiro, the founder of HAND Hospitality, which operates 18 locations in New York, discusses crucial topics around staffing. He covers planning, analyzing labor costs, optimizing expenses, dependencies with other operational levers, and key considerations for hiring and retention. Drawing from his 14 years of industry experience, Kiro shares simple and practical tips that you can implement in your restaurant operations.

Episode 1: How to Plan Your Staffing

Kareem Queeman pursued both formal culinary education and hands–on internships to build his baking skills. He combined learning in culinary school with real–world experience in various New York City bakeries, emphasizing the value of testing one's dedication through industry work before committing to culinary education.

Welcome to my series on restaurant staffing! I will share the key learnings about the staffing from my experience of 14 years in the restaurant industry in New York. In the first few episodes, we'll cover essential strategies for effective staffing in the restaurant industry.

Context: Understanding Prime Costs
Prime costs are critical in the restaurant business, directly affecting profitability and thus determining the financial health of a restaurant. The three major components of prime costs are labor costs, COGS (Cost of Goods Sold), and rent. Understanding these costs is crucial for making informed staffing decisions.

  • COGS: Essentially, this is your grocery cost, which is generally fixed within ranges but will increase with sales volume. A complex menu can increase COGS, making menu management essential for optimization. Other factors include inventory and supplier management.

  • Labor Costs: This is the most controllable expense, varying with staffing structure and operational efficiency.

  • Rent: Predetermined by lease agreements, it is less controllable than other costs.

The proportion of each prime cost bucket varies by the concept of the restaurant, location, and other operational aspects. Generally, for casual dining, I aim to keep COGS under 25%, rent under 10%, and labor costs under 35% of net sales. Specifically, for Manhattan locations, I strive to keep rent below 8% of net sales.

Labor is the most important cost bucket because it constitutes the largest share and is the most controllable, providing room for optimization.


Key Factors to Consider in Staffing
Different factors come into play when planning staffing. Your staffing needs can vary by restaurant type, concept, opening schedules, size, menu, etc. Major factors to consider include:

  • Your Restaurant Focus: Staffing needs vary by the focus of your restaurant—whether it’s quality of food or competitive pricing. This is tied to the type of restaurant: quick service, fast casual, casual dining, or fine dining. Each type has different staffing requirements and team profiles.

  • Volume of Sales: Topline sales impact the size of the team needed. Your daily sales figures dictate the required resources. While the right ratio between sales and team size varies and there is no single answer, you can use the rule of thumb to sanity-check if your spending is at the right level.

  • Leadership Team: The size of the leadership team impacts total labor costs, as these positions are highly paid – roughly more than $100K annually for a chef or GM in New York. Both BoH (Back of House) and FoH (Front of House) leadership numbers affect costs.

  • Menus: The number of menus impacts staffing size. More menus mean more staffing needs. While the number of sections (e.g., cold dishes, grill, fry) depends on the restaurant concept, optimization potential lies in reducing the number of menus, thus reducing kitchen staff needed for preparation, potentially leading to a ~20% reduction in staffing.

In the following episodes, I will discuss the details of each element to consider in staffing planning for a restaurant. Optimizing your team resources is a long-term journey, taking time to find the right balance as there are dependencies with other operational elements.

Episode 2: Setting up the guardrails of staffing needs

The type and concept of your restaurant shape all operational aspects, from core talent profiles to menu complexity. Aim to have at least one leadership-level staff member with a cultural background matching the cuisine concept. When budgeting team size, optimize the leadership team to, for example, one GM and one chef. Maintain labor costs under 35% of sales. For instance, $10,000 in daily sales typically requires 10 BoH and 10 FoH staff, equating to $1,000 in sales per BoH staff member (casual dining in Manhattan example). Set opening hours based on sales data and costs. Tailor these guidelines to fit your restaurant's unique concept, location, and operation.

Restaurant type, concept, and focus of your restaurant

The type and concept of your restaurant are the foundations of your operation. They impact every element of your restaurant, from interior design and menu to vendor selection, customer journey, and staffing needs, including the profiles you’ll need.

The type and concept of your restaurant are the foundations of your operation. They impact every element of your restaurant, from interior design and menu to vendor selection, customer journey, and staffing needs, including the profiles you’ll need.

The type of restaurant—whether casual dining, fine dining, fast casual, or quick service—and the concept (e.g., cuisine, operational focus, menu, bar space) set the foundational direction of your operation. This, in turn, affects various aspects of your staffing needs, such as:

  • Profiles of core talent: If you’re opening a fine dining restaurant, your chef is the most important hire. You’d need to work with a chef who has a high level of culinary taste and artistic pursuit. In a fast-casual setting, the focus would be on hiring a chef with experience in fast operations. The restaurant type and concept will guide the target profiles of core talent you want to hire.

  • Cultural Background: I always try to hire at least one person with the same cultural background as the cuisine concept in either the Front of House (FoH) or BoH. This helps bring authenticity to your restaurant, but more importantly, it will provide a thought partner who truly understands the cuisine and culture. Upon opening, a restaurant typically goes through a learning curve involving mistakes and adjustments, which can take 2–3 years. Having a thought partner will save you a great deal of energy and time throughout the course of these adjustments.

  • Menu & BoH Staff: The menu will be determined in line with the concept of the restaurant. The number of items on the menu and the complexity of the cooking process will impact the size of the Back of House (BoH) staff. Your menu will determine the number of sections in the kitchen, and the number of sections will impact the number of kitchen staff needed. I will discuss the details of the menu in future episodes, especially how you can optimize your menu.

Ultimately, the decision on the type and concept of the restaurant you’d like to run is yours. Choose a concept that you can operate best and that will work well with your target customers in your location. For simplicity, I will use a casual dining concept as an example in the following.

Budgeting the right team size

How can you estimate the right size of the team you need? As mentioned earlier, it really depends on various factors of your concept, focus, and operation, but here’s my rule of thumb calculation for a casual dining location in Manhattan, New York.

  • Correlation to Sales: Remember, our goal is to keep labor costs under 35% of sales. Let’s say you have 200 customers daily, with an average ticket size of $50, generating daily sales of $10,000. Therefore, labor costs should be less than $3,500 daily. A rule of thumb from my experience suggests that $10,000 in daily sales requires 10 staff members in the BoH and another 10 in the FoH. Thus, each BoH staff member should generate roughly $1,000 in sales.

  • Operation schedules: Operation hours depend on the concept and location of the restaurant. For example, if you’re running a Sweetgreen in Manhattan, most sales will occur during peak lunch hours. Fast-casual restaurants in New York are particularly busy during lunch. Opening days also impact labor costs from an ROI perspective. Post-pandemic statistics suggest reduced sales on Mondays in Manhattan, so examine your sales data to determine whether opening on Mondays makes sense.

  • Leadership team: The number of core and experienced talent in leadership roles impacts overall labor costs since they are the highest-paid employees. In New York, you should budget roughly $100K for each core talent, such as a chef and a GM. In the restaurant business, food and service quality are paramount, and running a restaurant is like going into battle. You’d need at least one leadership-level team member in both the BoH and FoH. Over the last 10 years, I’ve tried to have both a GM and an AGM to maintain the best customer service quality for seven days a week. However, recent post-pandemic sales data suggests potential room for optimization, as running seven days might not always be necessary.

Every restaurant has a different concept, focus, size, location, and operation, and there’s no single golden standard for what is right or wrong. However, running the right team with the right size significantly impacts your food quality, service quality, and profitability.

To recap, the type and concept of your restaurant influence the profiles of core talent and the menu, which impacts the size of your team. Budgeting for the right team size involves considering sales correlation, operation schedules, and the leadership team's structure. Use the rule of thumb above as a starting point, but tailoring these elements to fit your restaurant's unique concept and location will help ensure a successful operation.

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