Businesswoman doing finances and planning how to cut wage costs

10 Better Ways To Cut Wage Costs

Published May 7, 2018

Speaking from the financial perspective, wages are one of the most difficult aspects to manage.

On one hand, every business which strives to be successful needs to have quality employees, who usually aren’t cheap.

Budget constraints, however, dictate how much businesses can invest into their workforce.

This means that every good business owner needs to balance between the company’s finances and the need for good and satisfied employees.

This article will try to tackle this issue by giving you ten useful tips on directions you may consider when attempting to cut wage costs in a sustainable way.

1. Outsourcing Is Cost Effective

Outsourcing has become more common these days. There’s a reason behind its popularity. It guarantees that experts can work on a certain task and be more cost-effective.

You do not have to hire a full-time employee in order to perform all of the tasks involved in running your business.

Aspects of running your business like washroom maintenance and the cleaning of uniforms can be outsourced to trusted names like Alsco.

2. Value Productivity In Employees

It all starts with your hiring process. You need to pick the right people from the start. Choose those who are productive.

It is not easy to know right away which applicant is productive but that means spending more time in the selection process.

While you might end up paying the same amount to employees whether they are productive or not, you might be forced to hire more people if you employees are not very dynamic, so in the long run, it pays to spend the extra effort in picking the right people.

3. Reward Good Employees

A lot of money can be saved by using tools which track time in an effective way. The money saved in this way can be invested into useful incentives for the workers which show best results on a monthly basis.

In this way, you will be able to increase efficiency on a general level, while at the same time further boosting performance of the best among your employees.

4. Automatize

Automating a process would, of course eliminate the need for a worker, or in some cases workers, handling it. While getting a machine can be costly, in most cases they can perform the work faster and handle the work of multiple employees and so would be more than worth its cost eventually.

5. Make Sign-ins More Reliable

Time theft can be costing you a great deal without you even knowing it. When the controls are lax and the there are no effective monitors late or early sign-offs can become common. That means your business ends up paying for nothing.

You should use more reliable methods for employee sign-ins like face recognition or finger scanning.

6. Use Wage Tracking Tools

There are plenty of tools now that you can use in order to track wage costs. You should equip your business with those tools so you can have a clear picture of how much you are spending on wages.

These tracking tools can allow you to predict how much you would have to spend on wages on the coming weeks.

7. Set A Wage Budget

Once you have can predict your wage costs for the coming weeks using tracking tools, you can set a budget.

The amount of time that employees would be working should be based on that budget. If more workers are needed on a certain day that should be offset by reducing the number of workers on other days where there is no rush.

You have to be strict when it comes to following the budget.

8. Train Your Employees

One of the biggest reasons why workers tend to be less productive is the fact that they often aren’t properly trained for their job. This is why trainings should be an essential part of an employee’s experience in your company.

Trainings cost money, since trainers and material they need don’t come for free. They also require careful planning, like deciding on the way to select employees who will attend or choosing the best time of day to conduct them (during work hours or not?). However, the final result, trained and capable employees who are ready to be more productive and thus cost-effective, is something that you can’t put a price tag on.

Provide in-depth training to all of your newly-hired employees. The cost of the training would be more than worth it in the long run.

9. Cross Training Can Prove To Be Very Beneficial

People usually have more than one talent, and it would be wrong to limit them to only one role if there’s more they can contribute to your company.

Get to know your employees and let them show you all they know. You will be surprised at how many multi-talented people you will find, people who will be able to do more than one job and cut the need for additional employees.

10. Organize Space Efficiently

The layout of a workplace has an obvious effect on its output and productivity. This is most obvious in workplace involved in a manufacturing process where the layout determines the efficiency of the workers.

But even in an office, the layout would have a direct effect on the productivity of workers. Remember that the more efficient and productive your workers are, the more that you can save on wage costs.

The ideas listed above are only meant to get you started. If you analyze your particular business scenario, you will definitely be able to find more ways to cut down on your wage costs.

Don’t go too far, however, or else you risk sacrificing quality of your workforce.

Get in touch with Alsco to learn more about our professional renting services to help you reduce cost, while you maximise your business’ full potentials.

Photo courtesy of Freepik Image by @pressfoto

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