In many industries, labor cost is one of the biggest expenses for a business. According to the Bureau of Labor Statistics, wages and salary costs make up about 70% of employer costs for employee compensation. The remaining 30%of costs go toward benefits.
In a period of inflation and rising wages, how can your business manage the growing cost of labor? Discover 10 ways HR departments can help manage labor cost more effectively through the use of HR technology.
Ensure accurate timesheets
Inaccurate timekeeping leads to both overcompensating and underpaying employees. Neither scenario is good for your business.
Time & attendance software
Upgrade to digital timekeeping and attendance tracking with comprehensive time and attendance software. Learn about mobile accessibility, employee self-service, geofencing, and more to better track employee hours and ensure more accurate payroll processing.
Your time and attendance system needs to integrate seamlessly with payroll software. Bypass the needless expense and human error involved in manually copying data. Plus, access customized audit history and reporting to gain a better understanding of labor cost.
Review employee compensation
How recently have you reviewed employee pay policies? Have incentives kept up with changes in your workforce?
Resist cutting employee pay
In a competitive marketplace, cutting pay can drive away your best employees. Look for other ways to curb expenses.
Evaluate raises and bonuses
Instead of tying raises exclusively to seniority, consider adding more performance-based incentives.
Review employee benefits policies
Do your benefits reflect the needs and priorities of employees? Do your policy providers offer great value and useful services? Is your company paying things they don’t need or that no one uses?
Don’t overpay for benefit coverage
Use the collective bargaining power of your growing workforce to shop for more cost-effective benefits policies. Make sure you aren’t accidentally paying for benefits for ex-employees, contractors, and employees who opted-out of coverage.
Consider non-monetary incentives
Partner with local businesses for extra perks for your employees. Offer additional PTO to supplement sick days, parental leave, and other less flexible policies.
Review time off and leave policies
Are your policies unintentionally promoting tardiness and absenteeism? Review and update current policies in the employee handbook.
Consider remote/hybrid options
Develop a long term hybrid work plan to reduce the disruption of employee illness and other absences. Remote workers can also reduce the overhead cost of office facilities.
Flex work schedules
Use windowed work and flexible schedules to improve the productivity of employees, such as those with dependants and family obligations.
Help workers improve their work-life balance for better job satisfaction and improved mental health. Check vacation time and PTO policies to ensure employees are using their PTO/vacation days, but not more than those allotted.
Evaluate overtime policies
Time and a half overtime pay gets expensive. Could additional employees or workflow planning reduce the need for overtime hours? Time and attendance software alerts managers when employees are approaching overtime to better regulate these costly hours.
Manual schedule creation is time-consuming and still results in preventable errors. Invest in a scheduling solution that improves efficiency and can help manager labor cost.
READ: Eight Reasons Why Your Company Needs to Use Employee Scheduling Software
User-friendly schedule builder
Optimize performance by making sure you have the right number of employees. Make sure essential positions are covered, with effective teams covering the busiest hours.
READ: Ten Tips for Creating Better Employee Schedules
Overtime and conflict alerts
The right software can help prevent excessive overtime. Get automatic alerts for customizable schedule conflicts like approaching overtime.
Provide clear, accessible work schedules
Poor communication and unclear scheduling create problems across the whole team. Make the process simple with the right employee scheduling software.
Mobile-friendly, error-free schedules
Use scheduling software with all the essential features. Automatically detect conflicts and update employees on their cellphones.
Improve and facilitate communication
Give employees early access to schedules, and they can make change requests in advance. Anticipate predictable conflicts by staying organized. Thoughtfully planned schedules need fewer changes.
Find self-service scheduling software with drag and drop features that makes changes easy and clear. Enable shift swapping for employees to resolve minor scheduling conflicts on their own.
Encourage employees to make the most of their hours on the clock. A permanent shift in workplace culture requires more than a single pep talk.
Clarify personal and company goals
A performance-based culture begins with clear goals. Set realistic standards and reward achievements.
Financial bonuses for high performance can pay dividends with improved efficiency and customer satisfaction. Non-monetary bonuses include other perks and professional opportunities.
READ: Four Keys to Kickstarting a Performance-Based Work Culture
Use HR software to automate or outsource basic tasks. Employees will be energized by focusing on more meaningful work instead of repetitive minutia.
Hiring qualified and motivated employees can do wonders for your team. Recruiting and vetting candidates is costly, in both time and money. Hiring smarter gets in right the first time.
Applicant tracking software
Provide a better candidate experience with software that streamlines recruiting and onboarding. Simplify paperwork and quickly identify the most qualified applicants.
READ: Recruiting and Hiring Tips to Ensure You Make the Right Hire
Part-time workers, temps, and interns
Avoid excessive overtime, even when you don’t need additional full-time staff. Help your less qualified applicants gain valuable experience.
Commit to onboarding by dedicating more time and upgrading your process. Accomplish this by focusing on pre-planning, administrative details, culture focus, and comprehensive training.
READ: Making a PACT: The Four Keys to Successful Onboarding
Make the most of your training by reviewing your learning management and continuing education opportunities. Ensure employees have the training and skills they need.
New hire training
A lengthy onboarding process gets expensive. Make sure your training process covers essential material efficiently without wasting days of potential productivity.
READ: Help New Hires Hit the Ground Running with a Learning Management System
Don’t settle for employees who know the bare minimum. Cross-train employees for added flexibility and collaboration.
READ: Benefits of Using a Learning Management System to Promote Continuous Learning
Improve employee experience
Employee experience is more important than ever. Happy people make for better employees and lower labor cost.
Reduce turnover and increase retention
Save on the expense of recruiting and training new employees. Keep the ones who already know how to do the job. Listen to employee concerns and suggestions to improve job satisfaction.
Help employees feel invested
Build a company culture where employees are valued. Provide opportunities that reward employees for a long term commitment. Career paths should include opportunities for advancement and growth.
Learn more about how Netchex’s comprehensive HR technology solution can your save on labor cost:
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