When operating a business, expenses tend to continue to rise each passing year. Before long, your company healthcare will cost twice as much as it did five years prior. And forget about office supplies, Internet expenses, gasoline for vehicles, and everything else needed to keep your business running smoothly. These prices tend to fluctuate in some cases, but for the most part they continue to cost business owners more and more as time goes by.
Paying employees is one of the biggest expenses taken on by any company. Labor typically tends to cost more than many of your other expenses combined. When you factor in pay rates, healthcare, 401(k)s, vacation days, etc., as a business owner you see just how expensive your employees can get.
Do your employees deserve every penny? Absolutely! But there are ways to keep everyone happy while still cutting labor costs.
If you’re interested, we will share powerful tips to help you save on labor expenses.
Are you ready to find out how to cut labor costs? We’ll get to it right now.
Preventing employee turnover & other tips
Employee turnover is a huge expense for every business. You spend time, effort, energy, and money to train employees, only to have them disappear and have to repeat the process all over again. This is a terrible way to run a business, and quite frankly, it’s also very expensive.
Employees quit their jobs for a number of different reasons. In an effort to stave off employee turnover, your best bet is to tackle each one of these reasons head-on. This way your employees will stick around longer and save the company on labor costs over the long term.
Some of the most popular reasons why employees leave a company include:
- Part-time workers not getting enough hours – if your company hires part-time workers, make sure they have enough hours to keep them coming back to work. As long as your employees have enough work and can make enough money to pay their bills, they will stick with your company whether they like their job or not.
- Wages are too low – the biggest reason for employee turnover is low wages. If your business isn’t willing to pay its employees enough, then it’s quite possible that they will quit. And unfortunately they will quit often. Again, employees need to make enough money in order to get by. If they are barely making minimum wage, they will move on and look for greener pastures. It may seem counterintuitive to pay more when talking about labor cost-cutting, but the bigger picture tells us that this is the right move to make instead of having to train new employees from scratch every time somebody leaves.
- Flexible scheduling – in an effort to hang on to your employees for as long as possible, creating flexible scheduling is one way to keep them happy. Your employees are busy and lead busy lives. In many instances, they have important responsibilities that they must take care of outside of work. By being flexible with your employees and allowing them to take off when needed, you’ll keep everybody happy and ready to work when they find their way back into the office.
- Get to know employee scheduling needs – keeping morale high in your business is one way to guarantee that you’ll hang onto employees for the long-term. Make it a point to talk to the members of your staff and find out about their scheduling needs. This fits in perfectly with flexible scheduling, because meeting the needs and preferences of the members of your staff will keep them happy and excited to work for your company.
- Employee cross-training – while it is certainly good to have higher paid experts on your staff, having specialists can also hinder your ability to save money. It’s better to cross-train other members of your staff to prevent the need to pay specialists a higher dollar amount. And it will also grant you the ability to have anyone fill any role in any situation.
- Post schedules in advance – in an effort to keep everyone on the same page as far as work schedules go, a simple way to keep track of everything is to use time management software to post schedules online. By using time management software, scheduling becomes easier, more effective, and definitely quicker. Forget about posting schedules using paper and pen. This is time-consuming and completely outdated. Online software makes it easy to create a structured system and schedule employee workdays well in advance. You can do this at the click of a mouse button, and it is so easy to keep track of everything because it’s right there in front of you.
Cutting labor costs is easier than you think. Mainly focus on preventing employee turnover. And use the other tips that we have shared to make this transition easy to accomplish.
By Wendy Dessler, super-connector at OutreachMama