L is for Labour CostsThe A to Z of Profit Growth – L is for Labour Costs

 

It’s time for the next A to Z of Profit Growth… This week L is for Labour Costs!

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KMA The A to Z of Profit Growth – L is for Labour Costs!

That’s it for this week’s edition. Watch out for next weeks episode.

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Hi, it’s Kim again, I have your next profit growth advice. L is for labour costs, reducing labour costs, in particular. Labour costs account for a big chunk of your business expenses, so it goes without saying that if you can increase productivity and effectiveness of your team, then your profits will increase. Sit down and have a good think about your team, and are they working as effectively and efficiently as they can be? Because if not, you are wasting money.

Can you reduce the hours employees work, particularly overtime? Overtime can be expensive because it’s usually paid at a higher rate, typically time and a half the employee’s regular rate of pay. Review working practices to ensure you don’t overstaff and therefore you don’t have unnecessary employees at work or employees working unnecessary hours. For example, if you operate a cafe, you don’t want staff being paid to stand around when there is a seasonal effect, and there are a few customers in. Before recruiting, ensure wherever possible, the systems and processes your business has, are slick and efficient.

If they’re inefficient, then maybe utilizing latest technologies to improve efficiency will be cheaper than hiring more workers. I’m not telling you to cut all your employee hours and drown them in work, merely, just to think if there are some tasks that are done for the sake of doing them as they’ve always been done, maybe now is a good time to review your systems and processes. Good luck.

 

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