How can you improve the management of your staff costs
This is a big topic for a lot of small and medium sized companies.
In many companies the biggest percentage of money used to run the business is being spent is on staff/labor costs. This is specially true in small and medium sized companies, where money is usually tight.
Back at the office after my trip to Zürich, I rerun the measures we took in order to improve the management of the staff costs. Many of which will have an impact right away as well as on the long term.
1. KEEP YOUR SCHEDULES ERROR FREE and have a look at them on a regular basis. One of the main challenges was overtime and not being able to trace it back in order to have an overview on what is owed to (or from) the staff members. While creating an accurate and foolproof schedules, your have transparency regarding overtime and you are better able to forecast your labor costs and plan your budget more effectively. You also know when they are ill and on holiday, which helps you better plan the staff at peak times.
2. BREAK DOWN YOUR COSTS: Taking a look at your business vitals and keeping good records of your spending not only allows you to catch mistakes in what you’ve been doing and correct them, it also allows you to forecast your labor costs better. It allows you also to be able to adapt the expectations to the salary your employees are earning and have an overview of the staff costs per employee.
3. OPTIMIZE YOUR STAFF (STRUCTURE) overstaffing and understaffing can have major consequences on your CASH FLOW. And not being able to plan staff at peak hours results in a huge turnover loss which means having the right structure (full time, part time and flexible) in place is crucial in order to offer the best customer service possible.
4. IMPLEMENTING CROSS STAFFING As we were analysing the staff structure, we found out that certain (margin creating) services were accomplished only by a couple of staff members. This meant if they were sick or left the company, this kind of service could not be offered any more. So we focused on the these services and created a plan in order to train other employees to offer them too.
5. KEEP TRACK OF THE TURN OVER / EMPLOYEE. We found out that some employees were a great contribution to the company, while others contributed less. And it was time to do something about it. We set up a KPI in order to track the development done in this field and a process in order to exchange with the employee and find ways to improve.
The best way to improve the management of the staff costs is to keep (or implement) the tools up to date and have a couple of simple KPI overviews to track and tackle the challenges. This is what I am made for, enable business owners and entrepreneurs to fly through the fog and reach their goal.