4 Ways to Reduce Labor Costs Using Technology
Some of the most significant and important costs for any employer are direct labor costs: the wages paid to workers and other costs associated with hiring and retaining staff. Direct labor costs include employee paychecks as well as any taxes, insurance, and contributions to retirement funds paid by the employer.
For companies with a mostly salaried workforce, these costs remain steady throughout the year, increasing or decreasing only with new hires, raises, promotions, and turnover. But for businesses with a blended mobile workforce—including full-time, part-time, contractors, desk-based workers, and deskless workers—direct labor costs can be much more volatile.
Thanks to new technologies, managing and reducing these costs has become much easier. The right software can help reduce labor costs for a mobile workforce by optimizing schedules, reducing the need for overtime, automating or outsourcing tasks that are not central to the business, and boosting the productivity of deskless workers overall.
Here are four ways to reduce labor costs without reducing headcount or benefits:
1. Optimize employee scheduling to reduce unnecessary overtime
One of the simplest ways to reduce labor costs for a deskless workforce is to reduce or eliminate unneeded overtime. Unnecessary overtime is often a result of not having enough visibility or data to make the right decisions about team capacity and schedules. By optimizing the scheduling process, managers and schedulers can get more information upfront—and more visibility throughout the workday—to spot trends and ensure more jobs are completed during standard working hours.
At its core, optimizing your scheduling process means making the best, most efficient use of your workers’ availability. Optimizing your scheduling process may include:
- Accounting for travel time between jobs in the scheduling process in order to provide accurate appointment times to customers
- Including key staff details in your scheduling decision-making, such as relevant skills, certifications, or experience that may be relevant to your service
- Delivering the best travel route to deskless workers via mobile device to reduce late arrivals or distracted driving
- Booking recurring or high-volume jobs automatically so schedulers and dispatchers can factor them in from the start
Each company should determine its own unique strategy for optimizing the scheduling process based on the KPIs that are most important: customer satisfaction, cost of delivering services, employee satisfaction, total number of appointments, or other data points.
Reduce your labor costs
An optimized scheduling process benefits workers by providing more advance notice for shift changes, reducing unpredictability, and reducing the chance of burnout from frequent unplanned overtime. Schedule-optimizing technology can also ensure workers are getting appropriate rest times between shifts and that job start and end times are recorded accurately with minimal effort. When workers are more satisfied, the organization spends less money on recruiting, hiring, and onboarding to address turnover.
More intelligent scheduling also benefits managers, who can more easily tell the difference between an underutilized and an understaffed workforce. An optimized scheduling process helps managers see the underlying issue and take proactive steps to address it: improving efficiency and removing roadblocks to increase employee utilization vs. hiring additional workers to address staffing shortages. With this visibility, managers can avoid using overtime when another worker could handle the job in standard working hours.
What to look for in employee scheduling software
In order to use technology to reduce labor costs with technology, it’s important to realize that not all scheduling tools have the desired effect. (This is particularly true for free scheduling tools—they only transfer costs somewhere else.)
To maximize your return on investment, look for software that offers the following features:
- Scheduling optimization to fit your priorities: Whether you want to prioritize the number of jobs completed in a day, the satisfaction of your customers, reducing travel time, or another KPI, make sure the scheduling software allows you to set your own priority metrics and track progress against them.
- Ability to schedule a blended workforce: Different workforces and business models require different schedules. Whether you’re managing single jobs, shift work, or even irregular work patterns, the right software should allow you to easily manage different types of workers and schedules in a single system.
- Configurable to fit your team: Scheduling software should allow you to group and manage schedules by worker, customer, or job type—whatever makes the most sense for your company. The platform should also work with, not against, the other elements of your tech stack so you can pull in data points from CRM, HR, ERP, or finance software.
2. Automate repetitive tasks
Some tasks, like manually entering hours or customer information, can be automated so workers can spend their time on more complex work that needs the human touch. The less time workers spend on these administrative and operational tasks, the more productive they can be, driving down unnecessary costs.
Mobile workers and their managers alike benefit from thoughtful automation. With workforce management software, workers can automatically log and share information like arrival times, locations, and job completion details rather than manually filling out paperwork at every job site. Managers can see this information in a centralized system without having to contact each worker, and they can automatically approve time-off requests and simple schedule changes, freeing up time for important responsibilities like troubleshooting and coaching.
Automating repetitive tasks is also important for desk-based workers. Schedulers and dispatchers can focus on more complex jobs when the simpler recurring jobs are automatically added to the schedule with intelligent scheduling software. When finance software is integrated with workforce management tools, finance teams can automatically monitor expenses and alert team members if they exceed a certain threshold. With ERP and workforce management software, executives can set up automated reports on key performance indicators (KPIs), which allow leaders to see the real-time utilization and productivity of their teams and individual workers—information they need to make strategic decisions to improve their teams.
Look for a field management platform that allows you to automate and streamline the recurring activities that don’t require human intervention, giving your field workers and in-office staff more time to focus on customers and revenue-driving activities.
3. Boost workforce productivity
Technology is a key factor in the employee experience—one in four workers report that a poor experience with technology would affect their decision to leave a job or take a new job. But all too often, workforce technology doesn’t keep up with the needs of the business. More than one-third of employees feel outdated processes and technology make their jobs harder than they should be, and this is especially true for deskless workers, who depend on company-sanctioned devices and software to get work done.
The right technology can bridge the gaps that hinder productivity in several areas:
- Communication: Simple communication tools help field workers, dispatchers, schedulers, and managers stay in touch about schedule changes, issues identified in the field, and updates from customer interactions.
- Data collection: Mobile forms allow workers to collect customer updates and signatures right away, which reduces paperwork and human error. If the platform is integrated with finance software, mobile workers can trigger the invoicing process automatically or collect payment on the spot, which improves the speed and accuracy of billing.
- Customer interactions: When mobile workers can securely access the company’s customer relationship management (CRM) system, they arrive more prepared for the job at hand. Workers can use job details and past appointment history to ensure they arrive with the tools and knowledge they need to complete the work, reducing the need for repeat visits.
Well-designed productivity apps that mobile workers can use on their smartphone or tablet enable better communication, greater efficiency, and a better employee experience. By providing top-notch tools and software, companies can show that they value workers’ time and efforts, which results in more engaged workers, lower turnover, and lower labor costs.
Note for IT departments and leaders: When you start looking for a specific software solution, make sure you have enough feedback from workers about what they need. While 90% of C-suite executives say their company thinks of workers’ needs when choosing new tech, only 53% of staff agree. Make sure you know the workflow and pain points your workers experience before you get too far down the road.
4. Outsource tasks that are not central to your product or service
No matter what sector you’re working in, there are some business tasks that fall outside the scope of your workforce’s expertise or capacity. Outsourcing these more specialized needs to third parties can be more cost-effective than trying to handle them internally.
The best tasks to outsource are ones that happen only occasionally and require specialized knowledge, skills, or training to complete. For example:
- A healthcare provider that needs specialized software development to fit their day-to-day needs
- An HVAC repair company that needs advanced invoicing and payment processes to keep up with a high volume of invoices
- A solar panel company needs high-quality data on leads so sales reps with limited time can focus on the best possible prospects
These activities are important to business growth, but they are not the core services upon which the company plans to build for the future. Building a new business function for software development, invoicing, or research would require finding leaders with the right expertise, recruiting employees, hiring and onboarding staff, and maintaining and developing this team over time.
From a long-term cost perspective, it may be more practical to outsource these tasks to expert third-party providers. Outsourcing these non-core activities means companies can “shop around” for the best provider for their scope and budget, and when circumstances change, third-party providers are in a better position to scale up and scale down than internal teams.
Reduce your company’s labor costs with the right software
When it comes to improving your company’s bottom line, using the right technology to reduce labor costs and improve efficiency is a no-brainer. Today’s software tools can provide the support workers need to increase their productivity, spend less time on administrative tasks, and focus more of their time on customer service and core business activities.
Skedulo’s Deskless Productivity Cloud can help reduce labor costs by providing an all-in-one solution for managing your mobile workforce. Whether simplifying scheduling, providing tools to use in the field, or automating KPI reports, Skedulo’s intelligent management software allows customers, employees, and managers to reap the benefits of a best-in-class business solution. No matter the industry, the Deskless Productivity Cloud makes management of your deskless workforce a breeze.
Ready to reduce your overtime costs and boost productivity? Check out the Buyer’s Guide to Mobile Workforce Management to make sure you get everything you need from enterprise software.