9 Ways to Cut Labor Costs

As your small business grows, it's important to keep a close eye on labor costs. On the one hand, you want enough staff available to satisfy customers and deal with emergencies. But without solid processes and systems to track time and improve payroll efficiency, it can quickly consume more time and budget than intended.

That's why reducing labor costs and streamlining processes is the best way to stabilize your business and help you achieve your goals.

Not sure how to reduce your labor costs? We are here to help you ! We'll go over nine of the best ways to reduce labor costs and improve efficiency. We'll also give you planning, time tracking, and payroll tips that will help your business thrive.

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9 Ways to Reduce Labor Costs and Improve Efficiency

Fortunately, as a manager or team leader, there are many steps you can take to reduce your labor costs and improve your efficiency. And, with the right tools, you can even increase profitability at the same time. Let's look at nine of the best ways your business can start reducing labor costs.

1. Avoid overtime

As your business grows and you give your staff more hours or add more employees to payroll during peak periods, tracking overtime is more important than Never. Although overtime can be a useful tool in some situations, managers should not use it for convenience. You should only use overtime when it provides more return than cost. It's also important to make sure your company is sticking to its staffing budget and that you schedule employees appropriately.

Homebase timesheets make it easy to track employee overtime. Source: joinhomebase.com

Overtime charges are typically 1.5x an employee's hourly rate. To avoid them:

Accurately record timesheets Ensure workers have enough rest between shifts Use tools that trigger overtime warnings

When using Homebase, managers receive alerts when employees are approaching or have worked overtime so they can take action if necessary.

2. Streamline processes

It is essential that your business runs efficiently and that your staff do not waste time on unnecessary tasks. Wasted time translates into unnecessary budget expenditures, especially if employees perform tasks that have already been done by someone else or are no longer needed.

To avoid inefficiency, put systems in place for employees that help them make the most of their time. For example, a restaurant may have a list of people to check inventory in the morning and evening so staff don't waste time running to the store during peak times of their shifts, which may also have a negative impact on customer satisfaction.< /p>

Make a list of all the regular tasks your employees work on and determine the best time to complete them. You should be able to identify tasks that can easily be done consecutively or otherwise simplified. Having a checklist with all the necessary tasks and having staff sign off when they're completed can help everyone on your team know if someone else has already taken care of a specific task.

You can also take advantage of a communication tool like Homebase's Team Notes. These allow you to assign tasks or note what has been done and what needs to be done while you plan...