Controlling Rising Labor Costs

Labor costs typically account for a significant percentage of a company’s budget. Many businesses struggle to stay competitive in the face of growing labor costs and production outsourcing by the competition. Workforce management challenges such as payroll errors, human miscalculations, “buddy punching” by hourly personnel and scheduling conflicts all drive up labor costs that eat away at the bottom line.

But with the help of automated, robust timekeeping systems, businesses can employ scheduling strategies as a way to control escalating labor costs by maximizing workforce effectiveness, managing labor coverage budgets and lowering labor-related administrative costs. Scheduling helps managers examine labor usage, costs and budgets (actual and projected) on both an individual and group level so that managers can identify and hone their operations. Additionally, a timekeeping system automates basic labor-related HR and payroll functions. It saves time and money, maintains accurate and compliant records and ensures the continued success of the organization.

Two major contributors to increased labor costs are understaffing and overtime. An organization with understaffed teams, groups or departments will quickly find its employees logging more overtime hours — and paying a premium rate for their time.

In a sharply competitive marketplace, controlling labor costs is one important way businesses can maintain their competitive edge. The good news is organizations can easily monitor and manage cost-increasing factors such as understaffing and overtime to decrease their financial impact.

Taking Control: Labor Costs & Scheduling
One simple and efficient way to manage labor costs is through scheduling. Scheduling hones the productivity and performance of an organization’s workforce through cus­tomized management.


There are two types of labor-related costs that can be managed with scheduling: the cost of labor itself and the administrative costs associated with workforce management. When it comes to lowering labor costs, scheduling offers three benefits. First, it maxi­mizes workforce effectiveness, ensuring individual and department work schedules are operating optimally. Second, it manages budgets so that labor costs can be scrutinized for efficiency opportunities. Finally, it minimizes labor-associated administrative costs by automating organizational tasks.


Managing Labor Budgets
The most direct way to control labor costs is to analyze and optimize the costs directly associated with an organization’s workforce. The ability to report and review labor-related operational budgets is crucial to striking the perfect balance between workers’ time and productivity. Specifically, an organization can use its timekeeping system to:

  • Analyze labor costs at the individual and group level, and review hours and cost by department, team, brand, location, job function, and so on
  • Examine cost as it relates to productivity by tracking key performance indicators
  • Set target budgets for time worked and time paid
  • Compare budget to actual hours worked in real time without waiting for after-the-fact reports

A timekeeping system with flexible yet robust reporting gives organizations the ability to match labor costs with estimated time and budgets as well as actual time, budgets and productivity outcomes to identify potential areas of optimization.

To find out how C.T.E. Systems can help your organization, click here



Managing Overtime Costs




Use Scheduling to Control Rising Labor Costs

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