Today, labor costs have risen to an all-time high. And they consume a huge chunk of the balance sheet. However, if you are running a business, you know the value of good labor. Thus, nobody would want to part ways. But if your company is in financial strain, you either have to freeze recruitment or lighten your labor load. You can think smart and reduce your labor costs without impacting your employee numbers.
There are several ways you can reduce your financial burden. Read here how you can keep your company, your employees, and yourself in good health strategically.
Reduce Work Hours
You can make your business save some labor costs by converting full-time positions to part-time ones. Most employees will prefer a pay cut to lose the job. You can incorporate this into the work culture by facilitating job sharing. This is a brilliant arrangement that will help you to cut labor costs.
Moreover, you do not need extra equipment or space as all employees will be working in shifts. If you implement this on a large scale, you can also save on equipment costs and office or factory premises. Since your workforce will be sharing the workspace at different times, you will save on that front.
Get Technology for Your Assistance
You can get autonomous guided vehicles in Singapore for your manufacturing hub. This will have a direct implication on your labor costs. If you are not comfortable with dismissals, you can stop hiring. For all the new jobs created, you can distribute them amongst the present workers or employees. In the initial phase, you have to shell out more. But you will be saving that money in salary, healthcare benefits, retirement benefits, vacation time, sick time, and company overtime pay, to name a few. Moreover, machines need no breaks. Therefore, you can run them 24/7.
In the case of employees, you are expected to give a raise each year. It is not so with machines. They will turn profitable with each passing year. It will also help you get your investment back within a shorter duration. The AGVs come with sensors, cameras, and lasers, that help prevent mishaps. Thus, they are profitable and can help you to reduce labor costs.
Provide Employees With Predictable Schedules
If you provide predictable schedules to your employees, they can plan their lives better. You have to understand from the point of view of employees and give them work-life balance. You can incorporate some fair practices into your work culture so that everybody is happy and productive in the workplace.
You can post employee rosters for your manufacturing staff at least two weeks in advance. That way, there will be fewer sick leaves and absenteeism. Also, let them know about their off days prior. If your employees feel that you are caring towards them as an employer, they will also put in more effort to give you more profits.
Reduce Labor Costs by Reducing Turnover
Some companies seem to make it big even during testing times and disasters. You have to understand that recruiting a new employee takes more time than retaining an old one. Moreover, the efforts you put in will reflect on the returns soon after. You will be bewildered to know that more than half the working population in factories today are worried about their job security.
You can give your teams some liberty so that they can prioritize their tasks by themselves. Look into their wellness. You can have an excellent employee communication app to help disseminate information from all levels to management and vice versa. Also, allow employees to swap their shifts without major approvals. A happy workforce can get you more profits than you thought.
Give Incentives Rather Than Pay Hikes
You must have noticed that companies pay increments even after the workload remains the same for a few consecutive years. That is detrimental for most businesses in the long run. Therefore, one way out of this is to introduce performance bonuses and incentives. You have to take your supervisors into confidence while doing so. They are in direct touch with the workers, so you will find them to be more of a confidante.
Introducing such pay commissions will help in improving performance and delivery. You, in turn, will be paying more to the high-performers. It can act as an example for others as well. Establish SMART goals for your workers and give incentives to those who achieve them. If they can reach them, they excel, and you too.
These are a few ways you can reduce labor costs in your manufacturing hub. The same rules apply to other sectors as well. Be alert and take the right decision as and when necessary. That way, you’ll see your business soar.