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The Labor Budget Tool

Updated

The 7shifts Labor Budget Tool allows you to set your Projected Sales and Labor Targets so you can efficiently schedule your staff. This tool can be accessed at the bottom of the Schedule page.

Prerequisites

⚠️ The Labor Budget Tool will not populate if a department with no employees is selected. The tool relies on employee data to calculate and generate figures.

⚠️ Managers and Assistant Managers will require Can Manage Schedules permissions to access the Labor Budget Tool

SKIP AHEAD TOL

SKIP AHEAD TO:

Projected Sales and Forecasts

Setting your Labor Targets

Comparing Historical Sales

Comparing Actual Sales and Labor

Show/Hide the Labor Budget Tool

Projected Sales and Forecasts

Manually entering Projected Sales:

Enter a value into the Labor % Target and Sales row to update them for each day (shown in the highlighted field below):



Automatic Sales Projections and how they work:

1. When you enable Actual Sales with POS integration, your real Sales and Projected Sales will automatically populate.

Projected Sales are calculated using machine learning (AI) to improve accuracy over time, and consider seasonal trends. These algorithms forecast short-term, mid-term, and long-term trends respectively with 95% accuracy. 

Click here to find your POS and activate one of our available POS integrations.

2. You can still make adjustments to your Projected Sales, as needed, by clicking the highlighted field below and entering the sales for each day.

3. If you wish to revert any manual changes made to your Projected Sales, you can go back to the projections calculated by 7shifts. Click on the 'Re-sync' icon next to Sales in the first column of the tool.

⚠️ Managers and Assistant Managers with the Can manage sales projections permission will have access to modify projections. This will impact projections for the entire Account.



This icon will appear green when your projections have been synced/reverted back to the projections 7shifts automatically provides.


Labor Targets

As you start scheduling your staff, the budget tool calculates your labor costs. It updates in real-time to show you how much of your sales are allotted to labor.

To help guide you, the Labor Targets will appear in either red or green.

Red means your labor costs are higher than the Labor Target goal.
Green means your labor costs are equal to or below your Labor Target goal.

1. By clicking the highlighted fields below, you'll be able to enter in your Labor Target goal for each day of the week.

2. Click the 'Target' dropdown to change between the following Labor Target options:

Untitled_design__22_.gif

Labor Percentage 

Labor Percentage Target determines if there are specific periods in which your labor costs are eating up your earnings. It is calculated as:

= ( total labor cost  MON__1___2_.png  total sales  Untitled_design__30___1___1_.png  100 )


After setting your labor target to Labor % you can edit specific rows within the labor budget tool. The following screenshots are an example of Labor % in action:

1) Labor % Target. In this row, you will enter in your target goal. In other words, the percentage of sales used for employee labor.


(click on the image to expand)

2) Sales. An Actual Sales integration with a POS, or manually uploaded sales is required before Sales figures can be automatically provided. Alternatively, they can be entered directly into the fields (please note that this method will not calculate projections - only actual sales from a POS or the Manual Sales Importer will).


(click on the image to expand)

Indication of manually entered values will appear as a grey sync iconScreen_Shot_2023-02-02_at_10.56.05_AM__1_.png. To reset the values to their original state, click sync icon, and it will turn green Screen_Shot_2023-02-02_at_10.46.32_AM__2_.png.

A red pill means your labor costs are higher than your labor targets goal.
A green pill means your labor costs are within/below your labor target goal.
SPLH (Sales per Labor Hour) 

SPLH is regarded as the total dollar of sales per employee hour scheduled. It is calculated as:

= ( total actual sales  MON__1___2_.png  total  labor hours )

 

Hours 
Hours Target is the total scheduled labor hours for the location.
IPLH (Items per labor hour) - Beta
With IPLH, productivity is measured by the number of items produced, relative to employee labor hours. In other words, what is the labor needed to create items? IPLH is calculated as:

=   ( the number of items sold  MON__1___2_.png  total labor hours )

For example: for every 1 hour, Eugene wants to sell 50 burgers.

After setting your labor target to IPLH, you can edit specific rows within the labor budget tool. The following screenshots are an example of IPLH in action:

 

(click on the image to expand it)


IPLH Target. In this row, you will enter in your target goal. Or rather, the number of items you would like produced per hour. 

 Using our example, Eugene would enter 50 (burgers) into these fields.

(click on the image to expand it)

Items. The number of items sold will be automatically pulled in from a supported POS or can be manually entered in the Labor Budget Tool. 

Since Eugene is integrated with Toast POS, the number of items per receipt will automatically surface here (indicated by the green sync iconScreen_Shot_2023-02-02_at_10.46.32_AM__2___1__-_Edited.png).

Eugene can always override the numbers by entering a new value in the field (an indication of manually entered values will appear as a grey sync iconScreen_Shot_2023-02-02_at_10.56.05_AM__1___1__-_Edited.png). To reset the values to it's original state, Eugene can click on the sync icon.  

(click on the image to expand it)

A red pill means your labor costs are higher than your budget targets, for the number of items produced.
A green pill means your labor costs are within/below your budget targets, for the number of items produced.

Here is a list of supported POS that sync with IPLH targets:

  • Aloha POS
  • Dinerware POS
  • Lightspeed POS (L-Series)
  • Heartland POS
  • Micros 3700 POS
  • Micros Simphony II POS
  • Positouch POS
  • Revel POS
  • Squirrel POS
  • Square POS
  • Silverware POS
  • Toast POS
  • Qu POS
  • Positouch POS - Shift4
  • Harbourtouch POS - Shift 4
  • Future POS - Shift 4
  • Restaurant Manager POS - Shift 4
  • SpotOn POS

3. When copying over an existing schedule into another week, you can also select to copy over the Labor Targets from that specific week (only if using Labor Percentage Targets).

⚠️ With select POS integrations, you can also allocate your Actual Sales and set your Labor Targets by Department.

Read more about Department Based Budgeting here.

Comparing Historical Sales  

POS integrated customers can compare their budget Targets, Projections, and Actuals to see how they did last week or last year. If this past sales data is available in your account, this can help you forecast while building your Schedule and make more efficient labor decisions.

⚠️ This feature is only available on The Works plan and above.

To view your Historical Sales:

1. Click the dropdown (shown below) and select either 'Compare to Last week' or 'Compare to Last year.'

2. Here's the Historical Sales view when looking at the current week or a week in the past:

You'll see your Actual Sales (outlined in green) compared to your Historical Sales (outlined in red). 

3. Here's the Historical Sales view when looking at a future week:

You'll see your Projected Sales (outlined in blue) compared to your Historical Sales (outlined in red). 

Comparing Actuals Sales and Labor

⚠️  If Department Based Budgeting is enabled, it is only possible to view sales data for one department at a time.

⚠️ The Labor Budget tool in Day View will let you know how much labour you're scheduling per hour - and not worked hours. It does not have the ability to display worked hours per hour (however, the Optimal Labor Tool will be able to give you this information).

You will be able to review your Labor Target progress for previous days by enabling the 'Compare to actuals' view. This can aid in making scheduling adjustments as the week progresses and help you stay on target.

Enable this option on the Labor Budgeting Tool to compare your Projected Sales and Labor costs vs your Actual Sales and Labor costs.

⚠️ An Actual Sales integration with your POS is required before your Projected Sales can be automatically provided.

If you are using 7punches or have an active POS labor integration, your Actual Labor costs will populate automatically in the Labor Budget Tool.
To begin comparing to your Actual Sales and Labor data:

1. Click on the dropdown (shown below) and select 'Compare to actuals.'

2. You can view what days your Actual Sales and Labor costs were equal to or below your Target goals in green. If they were higher than your Target goals, they will be shown in red.

⚠️ Please note that the Actual Labor information will only populate for past days on the Labor Budgeting Tool.

To see your current day labor costs in real-time, you can view this data on the Sales vs Labor Dashboard or if you visit the Mobile Manager Dashboard on the 7shifts app.
❗️If you do not have a POS Actual Sales integration, these values will be replaced with your previous week's Projected Sales. If you do not have an Actual Labor integration enabled or use 7punches for time clocking, the labor costs will be based on your Employees' scheduled hours only.

Your Labor Budget Tool and Targets will be marked with an asterisk (*) letting you know that these calculations are only estimates and not based on your Actual Sales or the Employees' actual worked hours.

Show/Hide the Labor Budget Tool 

To maximize schedule space and view the information best suited for you, you can show or hide the Labor Budget Tool. Click on the 'Layout' icon Screenshot 2024-06-08 at 2.35.12 PM.pngand disable the 'Show labor budget tool' setting to hide this feature from the Schedule temporarily.

Screenshot 2024-07-09 at 2.41.45 PM.png

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