How to Keep Output High and Employee Costs Low


The goal of any task is to complete it on time, correctly, within the proposed budget, and with full efficiency. With the widespread business closings, falling demand, and sweeping layoffs... improving productivity and reducing operation costs are all paramount if a business has to remain competitive for a long time. Unprecedented economic challenges are forcing business owners to find ways to increase productivity, reduce costs, and make better decisions. 

However, the decision to increase productivity and reduce operating costs lies in focusing on employees- since labor is often the most significant controllable cost for any company. Here are some of the ways on how to do it. 

Design the Right Compensation Plan 

The key to ensuring you attract and retain top talent in your company is to provide a worker compensation that is in line with the fair market value. You can do an industry salary survey but, remember the skill set and responsibilities required by a particular job may vary widely from company to company. You must, therefore, analyze the specific job requirements as well as necessary qualifications before you determine appropriate compensation. Hiring managers can use a Point Factor Analysis to determine the correct compensation for each position. 

Outsourcing Shipping / Receiving / Fulfillment Processes 

For large or small organizations with inadequate resources, personnel, and warehousing space, looking for a third-party fulfillment center will be an ideal way to increase efficiency. Outsourcing the implementation of your company orders will help you focus on your core tasks in-house, which may help cut operating costs. By allowing another company to handle your fulfillment requirements, your in- house employees will be able to focus on their core responsibilities, allowing your company to expand business and profits. 

Develop an Effective Benefit Strategy 

The main reason most companies do not offer employee benefits plan is that it is considered an additional cost burden. While this makes a lot of sense, research shows that it is based on wrong assumptions and that corporate benefit is actually an economical solution to various common business problems. These may include absenteeism, significant reductions in costs, staff contentment and retention, recruitment costs and significant gains in attracting top talent. 

The MetLife's 7th, 2009 annual study on Employee Benefits Trends revealed that in organizations with less than 500 workers, 68 percent of employees chose retirement benefits, 71 percent chose health benefits, and 66 percent mentioned other benefits as being key influencers of their loyalty to a company, behind any salary/wages. 

Keeping your workers happy with benefits will lead to years of dedication as well as sustained growth for your company. With lower operation costs from experienced implementation of benefits packages, your organization is bound to have higher profit margins and expand into new markets. 

Reduce Administrative Overhead 

How much do the human resources managers and supervisors in your company lose every day researching and answering administrative queries from employees? In most companies, HR and frontline supervisors often get overwhelmed responding to employee questions on vacation time, payroll, and related issues. They hardly use their time productively! Why not let your workers serve themselves? 

A Nucleus Research survey showed that offering software-enabled or electronic self-service capabilities to employees can save up to $210 per worker annually. Letting your workers access their own work hours, payroll data, vacation accruals, and other details will help reduce administrative overhead. 

While these tips involve resources, effort, and time - they are bound to pay off regarding cost reduction and increased productivity. And that should be the end result of any business venture, regardless of the size.





I hope you enjoyed this article about methods your business can utilize to maintain strong production output while reducing employee costs.

Interested in more articles about business management?

Read My Posts:

- 4 Essential Leadership Skills For The Workplace

- Benefits Of An Employee Health & Wellness Program

Published by Michael J Schiemer
Owner of Bootstrap Business
Money - Marketing - Motivation
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Mike Schiemer Builds Better Business

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