5 Ways to Slash Labor Costs (Without Layoffs)
Looking for ways to reduce labor costs? Consider an automated timekeeping solution.
5 Ways to Slash Labor Costs With a Timekeeping Solution
Let’s look at the top 5 ways a timekeeping system lowers labor costs:
- Eliminate payroll surprises with real time clocking and accurate calculations
- Prevent unplanned overtime with manager alerts
- Enforce schedules with clock lockout
- Tighten project management with daily time and labor reports
- Capture all billable time with mobile timekeeping
Track Work Time in Real Time for Every Shift
An automated timekeeping system tracks work time to the minute. Therefore, it eliminates the errors and hassle of paper timecards or spreadsheets.
Employees can clock in with a physical time clock, web portal or mobile app. Once the employee clocks in, the system tracks hours on digital timecards. Intelligent clock prompts only present logical options when an employee interacts with the clock. This prevents missed punches and other errors. For example, if an employee punches out for an unpaid meal, when they clock back in, they will only have the option to end their break.
Is Manual Timekeeping Costing You?
The American Payroll Association estimates that paper timecards and spreadsheets can increase labor costs up to 8%. This is due to errors in calculations, indecipherable writing, timecard rounding in the employee’s favor, deliberate employee time theft, and manual data entry mistakes.
There is also the admin cost of fixing errors when they occur. For example, a manager may have to track down an employee to investigate and correct a missing punch. Re-issuing a paycheck due to an underpayment costs time and resources. Not to mention the frustration for the employee, of course. As a matter of fact, research reveals that an employee will consider switching jobs after just two paycheck errors!
Lower Labor Costs by Enforcing Schedules
Every business owner knows that you can only control your labor budget if employees follow the schedule. If employees exceed authorized hours, it throws everything off balance. Schedule enforcement and overtime alerts solve this problem
This is how it works. When a manager builds a schedule, they set max hours alerts for each employee. As employees work their shifts, the system tracks hours and sends an alert to the manager if a worker approaches overtime.
In addition, clock lockout prevents employees from punching in before their scheduled start time. If they try, they will see a prompt that instructs them to punch in at their actual starting time.
Use Metrics and Reporting to Make Data-Based Decisions
Another key benefit is analytics. Timekeeping systems generate reports which give you detailed 360° insights.
With time and labor reporting and metrics, leadership and managers can make data-based decisions and spot trends in the early stages. For example, you can see:
- Hours worked for all teams, shifts and locations
- Which teams, managers, or individual employees accrue the most overtime
- Employees that exceed authorized hours
- Requested and approved PTO
In addition, reporting can help you know whether job bidding is based on solid numbers and if there is adequate staffing to provide excellent customer service.
WorkforceHub Helps Small Businesses Lower Labor Costs
With rising inflation, small businesses need all the help they can get to reduce variable costs. Labor is the low-hanging fruit because it’s the largest line item in your budget. WorkforceHub helps small businesses manage labor costs to improve profitability in spite of rising inflation. Get a WorkforceHub demo today.
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