How to Reduce Staff Costs Without Killing Service Quality

How to Reduce Staff Costs Without Killing Service Quality

Published: 2nd May 2026

Video

In this video, we answer:

• Why are staff costs the second largest expense for F&B businesses?
• What percentage of revenue do staff costs typically consume?
• What are the two main ways to reduce staff costs?
• How can combining positions reduce the number of staff needed?
• How does better equipment help reduce staff count?
• Why should you replace full-time workers with part-time workers?
• How do part-time and foreign workers reduce cost per person?
• What is the potential saving from reducing staff costs by 5-10%?

Key takeaways:

• Staff costs are the second largest expensefor most F&B businesses – after ingredients. They can eat up 15% to 30% of your revenue. The restaurant that minimizes staff costs gains a serious competitive edge.
• The formula:Staff Cost = Number of Staff × Cost Per Person. To reduce staff costs, you must reduce either the number of staff or the cost per person – or both.
• Reduce number of staff – Method 1: Combine positions.If a restaurant needs a chef even for one customer, can you train front-of-house staff to cook during off-peak hours? One person serving and cooking is better than two.
• Reduce number of staff – Method 2: Use better equipment.Queue number machines and scan-and-order QR codes free up your staff from repetitive tasks.
• Reduce number of staff – Method 3: Reduce full-time contract workers.Most restaurants have only three to four peak hours a day. A full-time worker on an eight or ten-hour shift spends half their time with little to do. Replace them with part-time workers who only come during peak hours.
• Reduce cost per person:Part-time workers do not require bonuses, accommodation, food, or social welfare. Foreign workers can also lower costs – but factor in accommodation, insurance, agency fees, and training.
• The opportunity:If you can reduce your staff costs by just five to ten percent – while maintaining service quality – you will stand out easily among your competitors. That is your edge.

Full transcript

[0:00-0:10]
Visual: A busy Malaysian restaurant kitchen – chefs cooking, servers moving. Then cut to a restaurant owner looking at a stack of payroll bills, looking stressed. Text fades in: “Staff costs: Your second biggest expense.”

Narrator (Female, Confident, American Accent):
In F&B, service is everything. Apart from small one-man stalls like Japanese Omakase or night market snack booths, most restaurants rely on service to keep customers coming back. But here is the problem – staff costs are rising fast.

[0:10-0:25]
Visual: A pie chart showing ingredient costs (largest slice) and staff costs (second largest slice) at 15-30%. Text appears: “15% to 30% of your revenue goes to staff.”

Narrator:
Staff costs are now the second largest burden for most F&B businesses – after ingredients. For labor-intensive restaurants, it can hit 30% of revenue. But here is the opportunity. The restaurant that minimizes staff costs gains a serious edge over competitors.

[0:25-0:45]
Visual: A simple formula on screen: Staff Cost = Number of Staff × Cost Per Person. Then a split screen – left side shows a chef alone in an empty kitchen; right side shows one staff member cooking and serving. Text appears: “Combine roles. Reduce headcount.”

Narrator:
So how do we reduce staff costs? Two ways. First, reduce the number of staff. How? Combine positions. If a restaurant needs a chef even for one customer, can you train front-of-house staff to cook during off-peak hours? One person serving and cooking is better than two. Second, use better equipment – like queue number machines or scan-and-order QR codes. These free up your staff.

[0:45-1:05]
Visual: A calendar showing peak hours (3-4 hours) highlighted in red, non-peak hours in grey. Then icons of full-time workers vs part-time workers. Text appears: “Full-time = 8-10 hours. Peak hours = 3-4 hours. The rest is waste.”

Narrator:
Third, reduce full-time contract workers. Most restaurants have only three to four peak hours a day. A full-time worker on an eight or ten-hour shift spends half their time with little to do. Replace them with part-time workers who only come during peak hours. Hiring foreign workers is also common among restaurant chains – but be sure to comply with local regulations and invest in training.

[1:05-1:20]
Visual: A piggy bank with coins dropping. A chart showing average staff cost going down. Then a happy manager smiling. Text appears: “Lower cost per person. Same service quality.”

Narrator:
Second, reduce the staff cost per person. Part-time workers do not require bonuses, accommodation, food, or social welfare. Foreign workers can also lower costs – but factor in accommodation, insurance, agency fees, and training. Both options reduce your average cost per person.

[1:20-1:30]
Visual: Final shot of a well-run Malaysian restaurant – busy but efficient, staff working smoothly. Text appears: “5% to 10% reduction. That is your competitive edge.”

Narrator:
If you can reduce your staff costs by just five to ten percent – while maintaining service quality – you will stand out easily among your competitors. That is your edge.

[1:30-1:35]
Visual: Final text on screen with ARE F&B logo: “F&B E-Learning. Smarter operations. Better margins.”

Narrator:
This is F&B E-Learning. Stay tuned for more practical tips.

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