October 22, 2021
Reliable Solutions: Effective Methods To Reduce Labour Costs
One of the highest costs in business is labour or human resource management. As employees are the human resources of an organization, the cost involved in maintaining them calls for versatile and complex approaches, which is costly to manage.
However, as businesses mature, so does their demand for labour and human resources requirements. So it is equally essential for any company to provide their business growth with adequate labour supply to ensure uninterrupted functioning. All these naturally call for a higher labour cost which is unavoidable. But there are specific smart and practical measures organizations can take to keep their labour costs down effectively. Here are three such measures.
Avoiding overtime is one of the most effective ways organizations can keep their labour costs down. While it’s certainly true that a little overtime here and there may not seem like a lot, the overall picture is costly if you think about it. Especially if you have a large workforce, their overtime can quickly add up to a considerable sum which is expensive to manage in the long run.
On average, pay rises are made at rates like 1.5 to 2 times the regular pay. So when considering this cost as well, it’s essential you avoid overtime to reduce the high labour cost it results for your business.
If your business calls for a high workload, then instead of overtime, consider part-time staff only when required to handle these workloads– it’s much more productive and cost-efficient than overtime that some employees merely do for the extra pay.
Opt For Non-Monetary Compensation Upgrades
Some employers strongly believe that money is the only way to keep employees satisfied and engaged. They also accept that higher compensation is the right way to attract potential talent. While it’s crucial to remunerate your employee fairly according to industry standards, money is not always the motivator for many.
Nowadays, both blue and white-collar employees are more concerned about how they feel at a workplace and other non-monetary perks. This includes things like appreciation, recognition and security rather than a large figure in the payslips. So instead of restructuring higher compensation plans to keep employees engaged or motivate them, focus more on work culture, security, felicitation programs and other non-monetary compensation upgrades like lex-time, time off, free or discounted parking, gym membership discounts, retirement matching, mentoring programs, tuition assistance, childcare, e.t.c.
Hire Through Manpower Suppliers
Unlike other days, technology development has given access to a large pool of potential candidates and ample ways to advertise a company’s vacancies. While this is a good advancement, it calls for extra professionals, extra time and most importantly, extra cost.
Moreover, as recruiting processes are now structured using assessment and panel interviews, it again calls for extra professionals to carry them out, which adds more cost. When you hire through a reliable manpower supply company, they maintain a database of candidates to suit every workforce requirement across varying sectors. So it is easier for them to provide you with the required labour for a one-time cost, which is way cheaper than hiring an in-house recruiting team.
Depending on the manpower supplier, some also offer other flexibilities in workforce contracts, accommodation, transport, food and even employee support like training and development. So the majority of the cost you will have to incur separately is covered under a single provider, giving you more time and financial resources to direct on other core HR activities.
If you’re looking to reduce your labour costs through a reliable recruiting strategy, reach out to us at the World Star Manpower. As one of the renowned manpower supply companies in UAE, we are dedicated to providing apt blue and white-collar manpower requirements for every sector across the UAE with a high focus on performance, cost-effectiveness and efficiency.