The most effective way of controlling labour costs

by | 20.01.2016

Most businesses, no matter their industry, find labour costs form a significant part of their overheads...and it’s a cost that’s notoriously difficult to control.

 

Lean, successful business are those who effectively manage their labour costs to gain a competitive edge. Whether they be retailers, restaurants, hotels, health clubs or healthcare organisations, being able to control this fundamental area of their business allows them to plan better, make better decisions and deliver a higher quality service.

 

Before we look at the best way of managing labour costs and the workforce, we need to understand why problems arise and what their impact can be.

 

When margins are increasingly tight, any unforeseen increase in labour cost can have a huge impact on the business. In fact, in the healthcare industry, the inability to control labour costs is the primary reason care homes fail.

 

The major influencers, when it comes to spiralling labour costs, include the inability to manage staffing levels, too much time taken up by administration and, as a result of these, an inefficient business with low levels of productivity.

 

Successful business use technology and software as the solution to these problems. By using systems like Quinyx they are able to manage their staff much more effectively and control their labour costs in real-time.

 

Here’s how they do it:

 

Optimising staffing levels. Both understaffing and overstaffing can lead to unnecessary costs. Businesses who are understaffed will find employees working longer hours and claiming more overtime, often at a higher rate than they are usually paid. Not only does this cost go straight to the bottom line but the productivity levels in over-worked employees plummets, adding a further strain on the business.

 

The flip side of the coin is when there are too many staff compared to customers, with supply exceeding demand. This is common in restaurants and bars all around the world and often results in employees being sent home early from shifts.

 

With better workforce management, this problem can be avoided completely. Schedules and time management are automatically optimised and can be created in hours rather than days. By using historical data, Quinyx is able to predict the optimum staffing levels at any given time allowing the business to perform to the best of its potential, without the extra costs.

 

Easing the administrative burden. Manually creating complex schedules takes time and more often than not the schedules will be changed once staff see them. It’s not only schedules that take time. Time and absence management are two HR functions which can be automated and linked directly to payroll with workforce management software.

 

A charity in the UK who have just started using Quinyx used to take two days a week to create their schedules and at least a day a month to manage them. They are now creating the schedules in 30 minutes and there is minimal management time involved.

 

Constantly improving performance. By reducing the time it takes to complete these admin tasks and by always having complete control over labour costs, businesses who use workforce management software are able to dedicate more time to their staff, their customers and their product. Employees become more engaged when they feel cared for and so become more productive, essentially delivering more for less.

 

Through greatly improved business intelligence, managers are also able to make better, more informed decisions. The result of all of this is a successful business, with happy employees, that delivers financially, commercially and operationally.

 

This is why better workforce management is a key priority for small business, large organisations and everyone in between. It will transform your business and pave the way for growth, success and optimised performance. Let us show you how.

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Tommy Tonkins

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