RosterElf Logo
Cutting labour cost
Blog Post

How to Save 3% on Labour (the results are in!)

2 min read · March 01, 2017

Managing workforce costs to boost profitability

Workforce costs are one of the most significant expenses for any business, and managing them effectively is key to maintaining profitability. These costs often account for a large portion of a business's overall expenditure, making it essential for business owners to control them strategically. Proper management of workforce costs not only helps in reducing financial waste but also ensures a sustainable, efficient workforce.

However, cutting costs shouldn’t come at the expense of employee satisfaction or operational efficiency. Balancing cost reduction with employee engagement and productivity is the challenge that many organisations face. Optimising workforce management is critical, and the use of the right tools, such as RosterElf, can help businesses gain better control over their workforce costs while increasing efficiency.

Our recent survey, conducted with over 200 customers, showed that businesses using RosterElf saved an average of 3.4% on workforce expenses. This resulted in savings of hundreds of dollars each week and thousands annually, all while improving staff satisfaction and reducing errors in scheduling and payroll. Let’s explore how this is achieved.

Managing workforce costs effectively through savings and labour optimisation

How RosterElf helps control workforce costs

One of the most effective ways to optimise workforce expenses is to monitor and manage them in real time, ensuring you don’t overspend on staffing or make unnecessary adjustments. By integrating data such as sales and customer traffic with your staffing requirements, businesses can make smarter staffing decisions that help control labour costs without affecting service quality.

Through the use of rostering software like RosterElf, businesses can automatically track worked hours, preventing costly overpayments due to errors in timesheets. By accurately aligning staff schedules with demand and eliminating unnecessary shifts, businesses avoid the risks of overstaffing, which can increase payroll expenses, or understaffing, which can harm customer service.

Moreover, simplifying processes such as payroll and scheduling can free up time for managers to focus on more strategic tasks, ultimately improving productivity. The impact of these improvements is clear: by saving money on personnel costs and reducing administrative work, businesses can see immediate benefits to their financial health.

workforce cost control checklist to save on labour

Survey shows RosterElf saves on workforce costs

Our survey findings revealed that businesses using RosterElf saved an average of 3.4% on workforce costs, which resulted in significant savings over time. These savings were realised through two key strategies:

  • Implementing cost budgeting before rostering
  • Reducing time theft through accurate clock-in and clock-out features

For example, a business with a weekly payroll of $10,000 could save $340 each week, which adds up to $17,680 annually. A larger organisation with a weekly payroll of $50,000 could save $1,700 per week, totalling $88,400 annually. These savings can significantly impact profitability, which can then be reinvested to further grow the business.

Survey results showing workforce savings with RosterElf, highlighting time and labour savings for businesses in workforce management

RosterElf’s key features that reduce workforce costs

The success of RosterElf in reducing workforce costs can be attributed to its key features:

  • Budgeting personnel costs before rostering
  • Accurate clock-in and clock-out functionality to prevent time theft

These features ensure that businesses have better control over their staffing levels, improving the accuracy of payroll processing while reducing unnecessary costs.

How staffing optimisation reduces workforce expenses

Effective staffing requires accurate planning and budgeting, both of which RosterElf facilitates. By integrating past sales data, projected customer traffic, and staffing needs, RosterElf helps managers forecast the exact number of employees needed for each shift. This ensures that businesses are not overstaffed, which leads to unnecessary personnel costs, nor understaffed, which can hurt the customer experience.

Proactively managing staffing needs helps avoid situations where businesses are forced to pay overtime or suffer from inefficiency due to poor staffing levels. RosterElf provides a streamlined approach that allows businesses to maintain balance, reduce excess costs, and optimise their workforce.

How time tracking improves workforce cost accuracy

Time theft is a costly issue for businesses of all sizes. It occurs when employees do not accurately record the hours they’ve worked, whether through forgetfulness or intentional actions. With RosterElf’s clock-in and clock-out functionality, businesses can accurately track worked hours, reducing errors and preventing overpayments due to manual mistakes.

By eliminating manual time tracking, RosterElf ensures that employees are paid only for the hours they’ve worked, reducing payroll discrepancies and ensuring compliance with wage laws. This feature is crucial in preventing unnecessary overpayments, which can otherwise inflate workforce expenses.

Accurate time tracking with RosterElf, improving efficiency and reducing labour costs in workforce management

Small workforce cost savings lead to big gains

The savings that RosterElf delivers may appear small on a weekly basis, but over time, they can result in significant financial benefits. Consistent workforce cost savings can accumulate over months and years, directly improving the bottom line. These savings not only contribute to better profit margins but also free up capital for other investments, such as expanding business operations, improving customer service, or offering staff development programs.

Small changes in workforce management, such as more accurate scheduling and better budget tracking, lead to bigger gains over time. As businesses gain better control over their workforce expenses, they can reinvest savings into areas that foster long-term growth and competitive advantage.

The impact of workforce cost savings on profitability

For example, if a business saves 3.4% on its weekly workforce costs, the savings can quickly add up. A business with a weekly payroll of $10,000 could save $340 each week, which translates to $17,680 annually. A larger business with a $50,000 payroll could save $1,700 weekly, adding up to $88,400 annually. These savings can be reinvested in other business priorities, helping increase profitability and ensure financial stability.

As the savings accumulate, businesses can expand their operations, enhance customer experiences, or implement new technologies. These reinvestments help businesses stay competitive, sustainable, and prepared for future growth.

Screenshot of RosterElf’s budgeting feature showing how the software helps businesses track hours accurately and manage payroll efficiently

Start saving on workforce costs with RosterElf today

Now is the perfect time to take control of your workforce costs and improve your business efficiency with RosterElf. Whether you run a small business or manage a larger organisation, RosterElf simplifies rostering and payroll, saving you time and money. The software’s powerful features, including workforce budgeting and clock-in/out tracking, allow you to make smarter staffing decisions, prevent time theft, and reduce payroll errors. With its user-friendly interface, RosterElf can be quickly implemented, helping you streamline operations from day one.

Start saving on workforce costs and boosting profitability today by adopting RosterElf. See firsthand how simple changes can lead to significant financial benefits for your business.

Speak to a RosterElf expert about workforce savings

Want to learn more about how RosterElf can transform your business? Our experts are here to help. Contact a RosterElf specialist today to explore the software’s features and discover how it can be tailored to your business’s needs. Whether you're looking to reduce workforce costs, improve payroll accuracy, or streamline scheduling, our team can offer the insights and support you need. Don’t miss out on the opportunity to enhance your business’s efficiency and profitability—speak with one of our experts today!

Book a demo

Important Notice

The information contained in this article is general in nature and you should consider whether the information is appropriate to your needs. Legal and other matters referred to in this article are of a general nature only and are based on RosterElf's interpretation of laws existing at the time and should not be relied on in place of professional advice.

RosterElf is not responsible for the content of any site owned by a third party that may be linked to this article and no warranty is made by us concerning the suitability, accuracy or timeliness of the content of any site that may be linked to this article.

RosterElf disclaims all liability (except for any liability which by law cannot be excluded) for any error, inaccuracy, or omission from the information contained in this article and any loss or damage suffered by any person directly or indirectly through relying on this information.

Save hours on rostering and keep wage costs under budget

RosterElf is simple-to-use rostering software with small business prices, and local Aussie support.

Start free trial
FAQ

Frequently asked questions

Rostering and Payroll Software Questions? We have the answers.

  • Labour cost refers to the total expenses a business incurs to employ workers. This includes wages, benefits, payroll taxes, and any other costs directly related to compensating employees. Understanding labour costs is essential for accurate budgeting and financial planning.

  • A normal labour cost varies significantly by industry and region. In many industries, labour costs range between 20% to 35% of total revenue. However, industries like hospitality and retail may have higher labour costs, while sectors like manufacturing often aim for a lower percentage to maintain profit margins.

  • The standard labour cost is a predetermined cost set by a business, reflecting the expected expenses associated with employing staff based on efficient production. This standard helps businesses control actual labour costs by setting benchmarks and identifying areas where cost-saving measures can be implemented.

  • An example of a labour cost includes an employee’s hourly wage plus additional costs like payroll taxes, healthcare benefits, and retirement contributions. If an employee works 40 hours a week, the total weekly labour cost would include both their wages and any additional benefits.

  • Labour expenses typically include direct wages, overtime pay, employee benefits (like health insurance and retirement plans), payroll taxes, and any bonuses or incentives. Some companies may also include training costs as part of their labour expenses.

  • A reasonable labour cost depends on industry standards and business size. Generally, keeping labour costs between 20% to 30% of revenue is considered sustainable for many industries. However, specific businesses may require higher or lower percentages based on their operational needs and financial goals.

  • The labour costing rule is a guideline used to manage and control labour expenses within a set budget. It involves setting standard costs, tracking actual costs, and making adjustments to minimise discrepancies. By adhering to a labour costing rule, businesses can ensure consistent workforce spending in line with revenue goals.

  • Average labour costs vary widely depending on industry, location, and job type. In many cases, businesses allocate between 20% to 35% of their total revenue towards labour costs. Understanding average labour costs within your industry helps in setting realistic budgets and pricing strategies.

Newsletter

Want tips on how to manage your staff better?

Subscribe to our newsletter and get a weekly tip straight to your inbox.