Labor Cost Analysis – Deep Dive

Labor cost analysis is one of the most important tools for profitability. In the Swedish restaurant industry, labor cost typically runs at 30-35 % of revenue for full-service restaurants. Go above 40 % and staff eats your profit. Go below 25 % and service likely suffers.

Where to find the report

Go to Analytics → Staff Cost in the admin menu.

How the cost is calculated

Vendion calculates total labor cost from several components:

Formula:

Total labor cost = (Base wage + OB) × 1.3142 + Vacation pay

Example: 1,000 SEK base + 150 SEK OB = 1,150 SEK. Including social fees (×1.3142) = 1,511 SEK. Plus 12 % vacation pay = 1,693 SEK total employer cost.

KPI cards (3)

1. Labor cost — Total cost in SEK for the period
2. Share of revenue — Labor cost as % of sales
3. Revenue (period) — Reference for comparison

Benchmarks by business type

Combined chart: Labor Cost vs Sales per day

• Y-axis (left): SEK
• Gold area: Daily sales
• Blue/teal line: Daily labor cost

Look at the relationship — if the line moves with the area, you have good staffing flexibility. If the line is flat while the area varies, you have overcapacity on slow days.

Bar chart: Labor Cost % per day

• Y-axis: Percentage of sales
• Gold bar: Within budget
• Red bar: Over budget (warning signal)
• Red dashed line: Your budget level (e.g. 30 %)

Rule of thumb: If more than 30 % of days in a month are red, the scheduling is too rigid. Move staffing from red days to green days.

Budget comparison

Click Set budget to define monthly labor cost targets (% of sales). You set a value per month because winter months often have higher percentages (lower revenue, fixed staffing) while summer is the opposite.

Common problems and how to solve them

Problem 1: Labor cost 38 % Mon-Wed, 27 % Thu-Sat Fix: Cut Mon-Wed by one hour per shift, shift hours to evenings Thu-Sat.

Problem 2: OB cost is 22 % of total wages Fix: Review the schedule — can some shifts move from 17-22 to 16-21 to reduce evening OB?

Problem 3: Labor cost rises but revenue is flat Fix: Check the heatmap in Overview — are you scheduling based on when guests actually come, or just on opening hours?

Prime cost

Combine Food Cost % + Labor Cost % = Prime Cost. This is your single most important total cost metric. Prime cost should be below 60 % to leave room for rent, utilities, marketing, and profit. If Food cost = 32 % and Labor = 32 %, prime cost is 64 % — you have 36 % left for everything else.

Shift optimization: Concrete math

Say your labor cost is 34 % and your target is 30 %. A server at 1,200 SEK/week base wage costs ~1,690 SEK in employer cost. By cutting 4 hours/week (about 600 SEK in cost) on the slowest day and replacing it with 2 hours on the busiest day (about 300 SEK), you save 300 SEK/week per employee. With 8 employees that is 12,480 SEK/year without touching wages.

Compare to previous period

Activate comparison (e.g. "Same month last year") to see trend badges on KPI cards. Red arrow = cost rising relatively, green arrow = improving. If share of sales rises but SEK falls, it may mean you have cut staff too hard and are losing capacity.

Common interpretation errors

• Confusing wages with labor cost: There are three levels — gross wage (what the employee sees), wage cost to the employer (gross + social fees + vacation pay), and total labor cost (including OB and all premiums). Vendion always shows total labor cost for a fair picture.
• Not accounting for sick leave: High sick leave shows up in labor cost as unscheduled time. Vendion distinguishes scheduled time vs actual clocked time.
• Not counting the manager's wage: Your own CEO/owner salary should be included. Otherwise you're comparing apples to oranges with other restaurants.

AI Boss questions that help directly

Ask AI Boss things like:

• "What's the labor cost this month vs last?"
• "Which days are over budget?"
• "How much is the OB premium this month?"
• "Compare labor cost this week to the same week last year"