Five Ways You’re Overspending on Labor Costs

When you’re operating on small margins, even small cost increases can drastically cut into your profits. One of the biggest sources of these extra costs is labor. But this doesn’t mean that you have to be a Scrooge to save on labor expenses. Instead, smart scheduling using Homebase can protect your bottom line while still making sure your employees are well taken care of.

Employees often arrive early to avoid being late, and to some degree this is a good thing. However, when they punch in early, they may be sitting idle until their shift start time. Even when they are able to find tasks right away, you may still need them to stay for their full shifts to be available to customers, meaning that you’re paying for more hours than budgeted.

Homebase’s time clock allows you to set limits on early clock-ins or to block them altogether. If you do use this feature, be sure to make it clear to employees that they’re to relax in the break room if they decide to come in before their shift starts.

Many employers round employee time to the closest 10-, 15-, or even 30-minute mark. This is often a carryover from when they were using paper time sheets or because they’re still using manual time tracking.

In theory, this should all even out in the end. However, human nature means that employees will often wait that extra minute or two to round their time up. Rounding down could potentially lead to accusations of wage theft. To avoid these problems, Homebase tracks time to the exact minute.

A single skipped unpaid meal break automatically adds an extra hour or half hour to your labor costs. If this becomes a pattern, the extra hours quickly add up and could even push employees into overtime.

Homebase timesheets automatically highlight schedule variances such as skipped breaks. This lets managers easily figure out if more coverage is needed, or if employees are trying to pad their hours or are properly skipping lunch to leave early.

Walmart’s Customer First Scheduling has gotten a cold reception from its employees because of its impersonal approach, but despite any early bugs, it is largely meeting the company’s goals of matching staffing hours to busy hours. This includes using full-time workers for basic coverage and bringing in part-timers for extra help during the evening rush. The result is that the company doesn’t waste money on idle workers, workers don’t become overwhelmed during peak times, and customers receive prompt service at all times.

Homebase’s manager log allows you to take the same approach. The system automatically integrates with your point-of-sale system to track your peak selling periods, while managers can input notes about what happened during a shift to put a human perspective on the numbers.

A side effect of less-than-optimized scheduling and hour padding is excess overtime costs. When employees are forced to stay late because things are too busy or have unproductive time added to their hours, the wasted costs may not just be straight time but time and a half.

Homebase alerts managers when employees are close to or have already gone into overtime hours. This allows you to do things like scheduling these employees when you’re sure someone can relieve them right at the end of their scheduled shift. That way, you can avoid more draconian measures that damage employee morale such as limiting everyone to 30 hours or taking away shifts when employees are near overtime.

To learn more about how Homebase can help you schedule effectively and save money, sign up for free.