From your CEO to your newest rank-and-file employee, efficient staffing is essential to your competitive success. Your employees are your most important and valuable asset, but they also represent the biggest cost line on your budget spreadsheet. So keeping employment expenses under control is critical to your profitability.
Food for Thought
There are myriad steps you can take to improve your control over employment expenses. And the bottom line is your bottom line. By taking these steps, you help secure your leading market position for years to come.
- Convert fixed costs to variable. Develop and implement a planned staffing model. Reduce core staff to the lowest levels necessary to achieve business goals. To meet seasonal, peak and unexpected demands, partner with a qualified temporary staffing vendor.
- Eliminate overtime. Simply by using temporary employees instead of paying overtime can reduce your labor costs by at least 20 percent. As an added benefit, remember: temps work for your staffing partner, not you. All costs associated with processing and administering payroll and benefits are transferred from your organization to the agency.
- Reduce training costs. Training is expensive. In addition to the hard dollar cost of a training program, there are the soft costs of lower productivity and possibly poorer quality resulting from employing novice workers. Be sure your training and onboarding programs are efficient, effective and up to par.
- Limit benefits expense. Benefits cost an average of 25 to 30 percent in addition to an employee’s salary. Using temporary and payrolled employees (those paid through your agency) not only eliminates this cost, but also reduces employment risks.
- Tie compensation to value created. Rather than reward employees with raises, bonuses and perks based on length of service, shift the conversion to value creation. Base them on individual, team and company performance.
- Issue benefits reports to every employee. On a twice-a-year report, lay out the full financial value of all the benefits your company offers its team members, both directly and indirectly. This includes the dollar value of their salary, bonuses, health and other insurance, vacation time, FICA taxes, and so on. This serves as a reminder that, in the case of your permanent staff members, the money they receive in their paycheck is just a part of what you actually provide for them.
Partnering with a professional employer organization (PEO) enables you to spend less time on HR administrative tasks and more time on your direct revenue-driving responsibilities. The Lyons HR team serves as a seamless extension of clients’ in-house talent management staffs when it comes to recruitment, assessment, performance management, training and development, benefits and retention. Learn more about our PEO and staffing services throughout the Southeast. Contact us today!