Our best tips to improve your bottom line
Labour costs are the biggest single expense for many businesses.
This shouldn’t be too surprising.
After all, employees are also the lifeblood of most organisations.
But many companies could still find ways to reduce their payroll expenses without compromising on customer service.
We've previously looked at industry-specific tips for security businesses, hotels, and call centres.
This piece will look at five different ways you can trim your wage bill in almost any industry and still keep your business happy, productive, and profitable.
Review your business hours
There are few things worse as a small business owner than watching bored employees sat around in an empty store. Yes, there are usually small tasks they could be getting on with, but the fact of the matter is that employees are there to serve customers.
When they’re not doing that, it typically means you’re losing money. So what’s the solution? If there are times when your business consistently receives little to no visitors, should it even be open then?
Reconsidering the hours you operate between may sound dramatic, but so is the effect it can have on your costs. Trimming down on times when your business is losing money can be a game changer.
There are ways to track when your business is busy, from examining sales data to simply looking at Google Maps. But it isn’t as straightforward as closing whenever you aren’t making more than your costs.
Recognise that some customers may rely on less busy times and losing them from your base might have a greater impact. Trimming half an hour here or an hour there to start with might be all you need in the beginning.
Matching rotas to demand
If closing your business when it’s quiet sounds too dramatic, how about ensuring you have the right level of staffing? If you’ve got too many employees in during quiet times, that’s obviously going to cost you.
But having too few available at peak times might mean long waits or poorer service for customers, which could increase your churn rate and cost you in the longer-term.
Understaffed periods or a lack of cover can also mean needing to rely on more overtime, which raises your costs again.
Using a smart scheduling solution like Findmyshift allows you to match your schedule to your expected peaks and troughs throughout the working week. You should also look at the wider picture and consider what your peak times might be across the year.
Track time
If your employees work flexible hours, or just aren’t the best at arriving and leaving on time, time tracking could be critical.
Findmyshift can store the actual hours your employees work, ensuring they’re paid fairly for the effort they put in, while you aren’t charged for shifts they didn’t complete in full.
Setting up a digital time clock is a quick and easy way to get started if you don’t currently track time in your business.
Empower employee efficiency
Helping your staff members to be more efficient will also ensure that you don’t need too many people in for too long. If you can give them the tools to do their jobs in less time, you can save yourself money in the long run.
Of course, it isn’t always as straightforward as that. Countless businesses have invested in endless tools, only for them to fail because employees won’t or can’t use them.
Ensuring proper adoption of tools needs to be a thought out process that begins and ends with communication. Talk to your employees about the difficulties in their roles and what could help them to do their jobs more effectively.
Build a culture where they can communicate issues, have access to proper training, and are rewarded for buying into what you are trying to achieve with any new tool.
Invest in automation
Just as important as helping employees to do their roles is working out which tasks they shouldn’t be doing. Monotonous, repetitive tasks are prime candidates for automation, that can free up employee time and reduce your labour costs accordingly.
Your employees can help you identify these tasks—ones they have to carry out regularly, but require little skill or follow a set process.
With various physical and digital automation solutions out there, you are likely to be able to find a way for robots to complete these instead.
Some solutions might be as simple as a macro in a spreadsheet, while others could be far more complex, but the investment may well be worth it. Calculate the time it would save on a regular basis and use employee wages to see if you can justify the purchase.
However you decide to trim labour costs in your business, good luck!