Recent world events have everyone, from CEOs to consumers, checking their wallets and looking for ways to get the best value for their dollar. If you find that labor costs are climbing while your profit margin is shrinking, it could be that your labor pool needs to be reconsidered and adjusted.
1. Offer Performance Bonuses
If you have an employee who does twice the work of other employees, reward them with a visible bonus. Make sure it is something of value that other employees will want to strive for, such as
- a trip (with paid time off)
- tickets to a sporting event or show they’d enjoy
- vouchers to a fun activity that they already pay for
For those with employees who love to golf, give them vouchers to visit their favorite green. If your employees love live theatre, provide them with a night out to a special show. Make it personal.
This will take some work; you may need to survey employees about activities they enjoy with their partner or family. Again, make it visible and make sure everyone knows it’s a performance bonus.
2. Private Contractors And Freelancers
As a business professional or entrepreneur, you are always looking for ways to reduce costs and increase profitability. One area where you can save money is labor costs, which can make up a significant portion of your business expenses. One strategy to consider is hiring private contractors or freelancers instead of full-time employees.
Here are some ways private contractors and freelancers can help you cut labor costs and boost profitability:
- No Need for Benefits: When you hire a full-time employee, you are responsible for providing benefits such as health insurance, paid time off, and retirement plans. With private contractors and freelancers, you are not responsible for these benefits, which can save you a significant amount of money.
- Lower Overhead Costs: In addition to benefits, full-time employees come with other overhead costs such as office space, equipment, and supplies. With private contractors and freelancers, you do not have to provide them with these resources, which can save you money on rent, utilities, and other expenses.
- Flexible Scheduling: Private contractors and freelancers offer flexibility when it comes to scheduling. They can work on a project-by-project basis or for a set number of hours per week, which allows you to adjust your workforce based on the demands of your business.
- Access to Specialized Skills: When you hire a full-time employee, you are limited to their skills and expertise. With private contractors and freelancers, you can access a wide range of specialized skills and experience without committing to long-term hire.
- Reduced Training Costs: Full-time employees require training and onboarding, which can be time-consuming and costly. Private contractors and freelancers are typically self-starters who require minimal training, which can save you money and time.
Hiring private contractors and freelancers can be a cost-effective alternative to full-time employees. By taking advantage of the benefits of flexible scheduling, specialized skills, and reduced overhead costs, you can cut labor costs and boost profitability. However, it’s important to carefully consider the needs of your business and the qualifications of the contractor or freelancer you hire to ensure a successful partnership.
According to ITAC Solutions, an agency in the recruiting industry, the difference between contract work vs. freelance is that “Freelance work requires that the freelancer manage and report their income taxes and other federal and state withholdings but a contract employee is able to focus on their work while the staffing agency manages the rest.“
You can use a staffing agency to get in touch with private contractors too! There are many people who are not interested in full-time work but still have skills to offer on a part-time basis. Hiring a contractor can bring in help to get you through a particular staffing challenge without increasing your number of employees.
3. Upgrade Your Virtual Meeting Options
Business travel is not getting any cheaper. While some clients require a personal touch, being able to communicate over the phone with Business travel is not getting any cheaper. While some clients require a personal touch, being able to communicate over the phone and over video chat is becoming more popular.
Make booking a time to connect virtually with your first offer. You may be surprised at how many clients are happy to meet with you and your sales staff in a virtual setting. Focus your business travel dollars and time on the folks who need face-to-face communication.
You may also like: Ways to Improve Employee Productivity in the Workplace
4. Increase Your In-House Maintenance Staff
If your employees spend their days using highly technical equipment, any failure of such equipment can lead to a big drop in productivity. If your business needs to scan documents to support your client’s investment needs, how long does it take to repair the scanner when it quits?
Keep an eye out for employees who are prone to going the extra mile and offer them training on repairing such tools. If they need to travel to build these skills, put them up somewhere nice and include per diem. Employees with a broader base of knowledge are less likely to suffer when layoffs come. Even if you can’t offer them more money, you can increase their job security as they work to increase their value.
5. Carefully Evaluate The Required Manpower Before You Hire
If one of your challenges as an employer is staffing up for crunch times, it may be time to go back to the drawing board. Take a hard look at what benefits you can gain from offering just 2 hours of overtime each day.
Consider also offering split shifts. If you need someone on the job from 6 a.m. to 6 p.m., can you offer one employee a spot from 6 to 2:30 and another a spot from 9:30 to 6? Both employees would enjoy a change in commuting stress and such a schedule could be ideal for a working parent.
Of course, it’s critical to be fair to all employees. If someone is truly unhappy that they didn’t get a performance bonus, make sure you have done your homework and have the numbers ready for discussion. Expect some grumbling. However, you may also have launched a few people into working harder. Notice, reward and celebrate such behavior.
Jeena Alfredo is a passionate digital marketer at The Business Goals. She is working with other companies to help them manage the relationship with The Business Goals for the publications.