How much of your business costs are people-based?
Addtime explores how much your people really cost – and how you can lower the bill.
“Our people are our most important asset.” You’ll read lines like that on plenty of business websites. But they’re also, almost inevitably, your most expensive asset too.
How much do your people really cost? On the face of it it’s a simple calculation: divide your payroll costs by your total operating expenses. One survey by the US Census Bureau revealed that typical wage costs were 15% to 30% of a business’ total costs (although this varied dramatically by industry, with the childcare sector showing wages as a whopping 50% of running costs).
But your wage bill (even incorporating sick and holiday pay) hardly tells the whole story. What about pensions, NI contributions, training costs, professional qualifications, workwear, vehicles, H&S compliance and even the desks at which employees sit and the chairs they sit on? Bundle all of those into the mix and suddenly employee costs rise – typical estimates put the cost at 60% or even 70% of your total business expenses.
People, then, are by far the most expensive asset for most businesses, so any attempt to reduce business costs is going to have greatest effect if it also starts with your people.
Cutting the cost
As businesses grow it’s easy for them to become unwieldy. Making changes is like trying to change course in an oil tanker. But time and attendance and workforce management systems can help give businesses the sort of agility they used to have when they started out.
We call it ‘complete workforce vision’. Just because you now employ hundreds of people, it’s no reason to lose sight of what those people are doing. Just because they’re out on the road, it’s no reason to lose contact. And just because there’s more sick absence to manage, doesn’t mean you can’t take a personal, proactive approach to making life easier – for you and your employees.
That’s the power of our time and attendance and workforce management systems. They give you a view you wouldn’t otherwise have, that enables you to make decisions you wouldn’t otherwise be able to make. That, of course, means you can find cost savings you wouldn’t otherwise be able to find.
To talk about your workforce management system requirements, please talk to us.