Restaurant operators are facing one unavoidable reality in 2026 — labor costs continue to rise.
According to the latest restaurant industry data from TouchBistro’s 2026 American State of Restaurants Report, 96% of operators reported spending more on labor this year, with more than half seeing increases between 21% and 50%.
Even with growing pressure, only 19% of those operators chose to reduce headcount. Instead, operators are focusing on productivity, retention, cross-training, and smarter technology investments.
The message is clear. The future of labor management is about improving the performance of employees, not replacing them.
As operators search for scalable restaurant labor cost solutions, technology is becoming one of the most effective ways to improve efficiency while preserving hospitality standards. I spoke with Dan Durkin, consultant at Back of House, for his expert take on relieving these labor cost pains.
“Labor costs are rising because operators are getting squeezed from multiple directions at once — higher wages, increased competition for talent, and growing guest expectations,” Dan says. “Most restaurants understand they can’t simply cut their way out of the problem anymore.”
Labor has always been one of the restaurant industry’s largest expenses, but today’s environment has intensified the challenge. Several key pressures are building at the same time, each adding to higher operating costs:
At the same time, diners expect faster service, more convenience, and seamless digital experiences.
That combination has pushed operators to use tools that support productivity rather than simply reduce labor hours. In fact, many restaurants are investing in technology specifically aimed at reducing restaurant labor costs without sacrificing service quality.
The most widely adopted technologies include:
These solutions aren’t replacing hospitality, just removing the operational bottlenecks that slow teams down. Let’s take a look at how they can help streamline your operations.
QR code menus and payments are popular because they simplify one of the most time-intensive parts of service. Guests can browse, order, and pay without waiting for staff, which improves table turn times and reduces repetitive front-of-house tasks.
Self-service kiosks help speed up ordering in quick-service and fast-casual environments, especially during busy rush periods. And online ordering streamlines pickup orders, an increasingly popular way to enjoy a restaurant meal.
AI-powered phone-answering is increasingly used to handle incoming calls, answer common questions, and reduce front-of-house congestion during peak hours.
Instead of replacing staff, it allows operators to shift labor toward guest-facing service where it has the most impact.
“When staff are tied up answering phones or handling repetitive tasks, it pulls them away from hospitality,” Dan explains. “Automation helps teams stay focused on the guest experience.”
AI phone-answering tools reduce missed calls, improve order accuracy, and help restaurants handle more orders during peak service periods.
“Most operators aren’t trying to eliminate phone orders or human touchpoints,” Dan says. “They’re trying to stop staff from getting pulled in ten directions at once during a rush. When technology handles the repetitive volume, your team can actually focus on service.”
These systems keep front-of-house staff focused on in-person service instead of constant phone and order interruptions. That balance helps restaurants serve guests more smoothly while making better use of staff during busy periods — an important part of reducing restaurant labor costs without hurting service quality.
One tool with a big impact is restaurant scheduling software.
Traditional scheduling methods often rely on a manager's judgment, which can lead to overstaffing during slow periods, which creates unnecessary labor costs, or understaffing during rushes, which can lead to service breakdowns.
Today’s scheduling systems use simple data to help managers build better schedules. This data includes:
“One of the biggest mistakes restaurants make is scheduling based on instinct instead of actual sales and traffic patterns,” Dan says. “Modern scheduling software gives operators the visibility they need to align labor with demand much more accurately.”
Automated scheduling features reduce manager workload while improving employee flexibility, using tools like:
For restaurants struggling with overtime costs or inconsistent staffing levels, scheduling automation has become one of the most valuable restaurant labor cost solutions available.
Technology investments are also helping restaurants improve retention and reduce turnover-related costs.
Modern restaurant workforce management systems like the ones from Push create a single platform for several core functions:
This creates more transparency for employees and reduces operational strain for managers. It also helps operators make better staffing decisions that directly impact labor costs.
Retention is now key to labor cost control, especially given the expense of recruiting and onboarding new employees.
“Retention has become a huge part of labor cost control,” Dan says. “When restaurants improve communication, scheduling transparency, and employee flexibility, turnover drops — and that has a direct impact on profitability.”
Cross-training has also become a go-to strategy for modern operators, helping teams adjust quickly during labor shortages or unexpected demand spikes.
“Cross-training is becoming one of the smartest operational strategies restaurants can invest in,” Dan emphasizes. “It gives operators flexibility while also creating growth opportunities for employees.”
Operators are increasingly using these tools in specific areas rather than everywhere.
“The restaurants seeing the best results are using technology to remove friction, not replace hospitality,” Dan explains. “Guests still want human interaction, but they also want speed and convenience.”
Even with better tools and strategies available, many operators still struggle with avoidable mistakes:
The most successful operators use technology to support employees, not replace them.
The restaurant industry’s labor challenges aren’t disappearing anytime soon. But operators are adapting in smarter ways.
Instead of cutting staff, restaurants are using technology to help teams work more efficiently and see operations more clearly. The best operators know that efficiency and hospitality can work together.
Technology alone isn’t the solution. But when used well, it becomes a powerful tool for building sustainable operations.
For operators navigating rising wages and ongoing staffing pressures, investing in scalable restaurant labor cost solutions, smarter restaurant scheduling software, and integrated restaurant workforce management systems may be the clearest path toward long-term profitability while still delivering exceptional guest experiences.
“As an industry, we’re past the point of choosing between efficiency and hospitality,” Dan says. “The operators who win are the ones who figure out how to deliver both.”
If your operation is feeling the pressure of rising labor costs, smarter systems and tools can make a measurable difference. Dan works with operators to identify inefficiencies, evaluate technology stacks, and build more sustainable approaches to staffing, scheduling, and workforce management.
To explore tailored restaurant labor cost solutions for your business or get guidance on improving scheduling, retention, and operational efficiency, reach out to Dan to schedule a free consultation.