5 Tips To Save Your Business Thousands in Labor Costs

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Stephanie Graham
February 3, 2021

In the foodservice, retail, and hourly employee industries, labor costs are one of the biggest expenses you will ever face, next to the cost of goods.

More specifically the way you calculate and organize those costs could be contributing the success or failure of your business.

Here are 5 features you may not have considered, that will save you thousands of labor costs.

1 - Eliminate early punch in's and late punch out's.

It's not uncommon that an extra 5 minutes here or there can add up to thousands of dollars in unnecessary payment to staff.

To ensure that you are only paying employees for their time worked, invest in reliable time clock software.

With this software you can automate employee start and finish times, as well as review and approve hours. A recent interview with the owner of 13 Booster Juice franchise locations confirmed that she estimated she was saving 10 minutes per day, per employee at all 13 locations. That adds up to thousands of dollars a day saved.

2 - Streamline and automate payroll.

Automating payroll is more than just saving your business money, it will also save you a significant amount of time, potentially replacing a full time payroll persons job in the click of a button.

If manually transferring data takes 5 minutes per employee every pay period, this activity alone will take 500 minutes per period or 216 hours per year!

If you automate payroll, you don't have to worry about frustrating errors happening.

Streamlined software that automatically pulls hours from time tracking software will save you hours of time running payroll.

We recently asked Tom Mahs, the operator of 6 Freshii franchise locations, how much time he thought using this type of software saved him. He replied over 550 hours saved on running payroll per year.

3 - Automate statutory holiday calculations.

On average, a statutory holiday will occur every month, and depending on the number of employees you have, calculating statutory holidays can take days! Varying hours, positions, rates and deciphering who is eligible for statutory is time consuming, and errors can be costly.

Start loving statutory holiday's again by investing in a platform that can help automate this process!  With Push software, stat holidays are automatically calculated on each and every shift, and streamlined to payroll.  

This means you are saving time on running the calculaltions, but you aren't paying someone time and a half that hasn't hit the required number of hours worked to gain the added wage.

4 - Watch the clock.

What happens when an employee clocks-in 10 minutes before their scheduled shift? What about 15 minutes after their scheduled shift? If these hours are automatically being pushed to payroll - then you may be paying employees for unauthorized time. If your managers are reviewing each shift manually then you should really ask yourself - how efficient is this process?

Look for payroll software that automates your clocked hours to scheduled hours comparisons, and receive alerts for approvals in hours that are beyond budget. This feature alone will save you thousands.

5 - Sales integration to lower labor costs.

Great, labor cost was 10% lower this month compared to last. Every business owner knows that labor is only half of the equation. A good labor management system will couple costs with sales, so you're in the position to properly assess how your restaurant is doing.

Integrating with your point-of-sales software will allow you to keep an accurate pulse on your labor cost, so you know when to staff up, and when to cut your workers. Without this data you could be overstaffing, and purging money -- or understaffing, and losing opportunities for sales.

What Now?

When it comes to running a business leaning into software is a great way to succeed, instead of spending hours manually calculating things with payroll software you can easily use software that both integrates, and automates systems to help your business thrive.

Spend less time manually running your operations and lower labor costs by investing in ways to have it run itself!  So you have more time to do what you love.

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“In the labor numbers, we were reporting about a $300 to $400 difference than what we were getting through Push!”

-Tara Hardie, ZZA Hospitality Group, 16 locations

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