Stop calling labour your biggest expense
How many times have you said...?
"Labor is killing us."
Honestly, you may very well be right.
Labor costs have increased dramatically over the last several years. Recruiting remains difficult. Retention is harder than most operators would like to admit. And every payroll cycle seems to bring another reminder that labor is one of the largest line items on the P&L.
But I want to challenge something...
Finding people is difficult.
Keeping people is difficult.
Developing people is difficult.
There is no question that the labor market has changed dramatically over the last decade.
But I wonder if we've become too quick to blame labor for outcomes that are actually rooted in leadership.
Consider what happens when turnover increases. The first instinct is often to point to external factors. People don't want to work. Expectations have changed. The labor pool isn't what it used to be. Sometimes those explanations are accurate. But they can also become convenient. They allow us to explain the problem without examining whether the experience of working inside our restaurant has contributed to the outcome.
The same pattern appears in training. When a new employee struggles, we tend to assume we hired the wrong person. Yet in many restaurants, onboarding consists of shadowing another employee for a few shifts and hoping information transfers successfully. If expectations are vague, training is inconsistent, and follow-up coaching is nonexistent, can we really conclude that the employee was the problem?
I'm not suggesting that every staffing challenge is a leadership issue. That would be naïve. There are absolutely market forces that operators cannot control. But I do think many owners underestimate how much influence they actually have over the quality, consistency, and performance of their teams.
That's because leadership compounds.
A great manager doesn't simply improve one employee. They improve every employee they touch. They create clarity. They reinforce standards. They coach behaviors before they become problems. Over time, that influence spreads throughout the organization and shapes the culture people experience every day.
Weak leadership compounds too.
The difference is that its effects are often mistaken for labor problems.
The symptoms look similar. High turnover. Poor execution. Low accountability. Inconsistent guest experiences. Constant frustration. Because those symptoms involve employees, we naturally assume employees are the root cause.
But symptoms and causes are not the same thing.
That's why I've become increasingly convinced that many restaurants don't need dramatically lower labor costs. They need dramatically better leadership systems. They need managers who know how to coach. They need clear expectations. They need accountability that is consistent rather than emotional. They need development pathways that help average employees become stronger contributors over time.
Those investments rarely show up on a labor report.
But they show up everywhere else.
Chip Klose - MBA, helping independent restaurant owners hit consistent, predictable 20% profit, Restaurant Coach, Author, and Keynote Speaker with 25 years of industry experience.
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