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5 Tips To Keep Labor Costs Under Control

Published: March 14, 2016

As the most significant expense to many organizations, labor represents a very important, and very sensitive cost center for decision makers to monitor and control. Here are five things to implement to ensure you keep your labor costs under control.

1. Over Staffing. At the risk over oversimplifying a rather complex issue, it is worth starting off by talking about over staffing, and the importance of avoiding it. Many supervisors may prefer to schedule more staff than is strictly needed with the mindset that more people equals a smoother shift. The unfortunate reality is that there will always be hiccups and the unexpected during the course of a working day, and as such, a better solution would be to ensure your staff are well prepared and trained to handle what is required of them.

2. Cross Training. Top management, supervisors and staff alike will all benefit from cross training. Staff will have a broader skillset, and for many this is a source of great work satisfaction. Supervisors will be able to rely on more staff to perform the required tasks. Top management will have lowered operational costs. In many cases, it is rather easy to achieve too. For example, instead of employing a forklift driver and a stock control supervisor on your factory floor, consider taking the time to train your forklift driver so they are able to manage the stock. For further information on ensuring you have the right skilled staff on hand to achieve your business goals, click here.

3. Check clockings. Are your staff actually working the times that they were scheduled to work? Many employees may prefer to overestimate their working times to ensure they are paid slightly more every day than they are actually owed. The associated costs can become an increasing burden to a business over time. Consider the benefits of implementing a biometric clock combined with a rigorous time and attendance system to ensure shifts are adhered to. With the system, supervisors will be on top of any anomalies to their schedules.

4. Forward planning. To avoid being caught out by last minute events, discuss all schedule change requests in advance. Changing shifts and schedules can be problematic when people start to work overtime, working more hours than the budget can accommodate and even risking breaking labor laws by working too long.

5. Audit and review. Our fifth and final tip to keep labor costs under control is being consistent with your auditing and reviewing. With a Mitrefinch system, you can run an absenteeism/lateness profile on individual employees, groups, and departments to check if you have any issues occurring. Regularly auditing and reviewing your labor and associated figures is the best way to help improve productivity too. Always take the time to discuss issues with employees to understand better, and ensure your company is running smoothly.

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