7 Tips To Control Labour Costs

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7 Tips To Control Labour Costs

Your employees are your biggest asset. But they can also be your biggest expense. Getting a handle on your labour costs can be a challenge, but it’s worth every bit of effort you put into it. Here are seven tips for controlling your labour costs.

1. Track Time & Be Transparent With It

When your staff are at work, they are not 100% productive. No matter how good your employees are, there are going to be “dead zones” in their day.

The goal of tracking time isn’t necessarily to shed light on when your team members are off-task or being unproductive. You already know they aren’t completely engaged all the time.
Rather, the goal is to uncover areas where improvements can be made. Let’s say one of your workers is spending too much time putting together a comprehensive end of day report when a quick, concise report would be more than enough. Having identified this issue, you could ask them to change their approach.

2. Assign The Right Work To The Right People (Match Skills To Tasks)

As it so often happens, companies bring on new workers to handle tasks that someone isn’t already working on. The issue is that the tasks being handled by your workers aren’t always matched to their skills.

Some people are good at things you aren’t, and sometimes enjoy things you don’t. Some people are good with numbers. Others are good with language.

Instead of assigning tasks based on one’s job role, why not try assigning tasks based on their competencies?

3. Have A Plan

You can’t steer a parked car. The plan you start with may not be perfect, but at least you can adjust as you go.

Having a documented plan for controlling labour costs will allow you to check in to see if you’re on course or if you need to optimize your plan.

If you don’t have a destination in mind, there’s no way to get there. If you know what you’re trying to achieve, you’ll begin to see the steps you need to take to get to where you want to go.

4. Ensure Tasks Are Clearly Understood

All too often, leaders set invisible targets for their staff. What this means is that they have certain expectations they want met but never communicate them.

Furthermore, sometimes people are assigned tasks they don’t clearly understand. Someone who previously handled these tasks may know all the ins and outs and may find it easy to do, but that doesn’t mean someone who’s doing it for the first time would automatically know what to do.

Ensure your workers know exactly how to carry out a task. Create checklists and documentation for best results.

5. Establish A Reasonable Yet Aggressive Expectation For How Long Things Should Take

“Work faster”, barks the superior, as if the best work is produced under heavy pressure and oppression.

Instead of giving instructions in the moment, why not establish shorter deadlines for the tasks that need to be completed? Don’t be unreasonable but be slightly aggressive.

As Parkinson’s law states, work expands to fill the time available for its completion. Avoid unrealistic target dates but see if you can cut down on the amount of time it takes to complete certain tasks.

6. Give Employees Good Tools For Managing Time & Expenses

The reality of the matter is that your employees just don’t know, and in some cases, don’t care how they are spending their time at work.

But what if you gave them clear performance goals to work towards? What if you gave them authority and autonomy to track their own time, expenses, sales, and other key performance indicators?

Seeing how you’ve spent your time can be an eye-opening experience. Many people just need a mirror to look at.

7. Don’t Overschedule Staff & Risk Burnout

There are certain costs that often go uncalculated when it comes to employees. For instance, if a worker burns out, gets sick, or quits because they don’t enjoy their job.

Replacing your employees can be expensive. Carefully consider the costs of recruitment, onboarding, and training before burning out your staff.

Resist overscheduling your employees and give them plenty of flexibility, whether it’s working from home, taking personal days, or just reducing the hours they need to come into work.

You can only improve what you track and measure.

So, if you aren’t already tracking how your employees are spending their time, what they’re working on, how much time it should take, how much time it’s taking, and so on, you’re basically going at this blind.

Controlling your labour costs begins with understanding how your resources are being allocated.