Can Labor Costs Be Reduced Without Sacrificing Service?
Businesses often look for ways to reduce their costs. The reason is because the lower that labor costs and other expenses are, the higher a company’s profit margin can be. However, it can oftentimes be difficult to try to reduce labor costs without simultaneously reducing service and overall quality. Here are some great ideas for cost reduction that does not sacrifice quality.
1. Have some employees work remotely
Because of technological advancements, it is now possible for many companies to have some of their employees work from home. Doing this can help save on rent, which is often incredibly expensive, especially in big cities. The fewer the amount of employees who need to be at the office, the smaller the office space you can get and the more you can save.
Employees who work from home can also save money on transportation that they would ordinarily spend commuting to and from work. So this is a win-win when it comes to cost reduction.
2. Hire independent contractors vs full-time employees when possible
Most companies will need to have a certain number of full-time employees. However, many companies will have the option to hire independent contractors for some positions instead of taking on full-time employees. Independent contractors can be less expensive than full-time employees.
The reason is because for independent contractors, you do not have to pay payroll taxes, you don’t have to provide benefits, and when there is no immediate work to be done, you can let them work for other companies. All of these things can save significant amounts of money. But, if the contractors are good, then you will not be sacrificing any service.
3. Hire interns
There are many college students who can get official college credit for working as an intern at a company. This may be the only free source of labor that is available to you, so it may be wise to set up an intern program at your company where interns can get credits by working for you.
The interns will benefit from getting the credits and by getting critical work experience, and you will benefit in the form of cost reduction for a certain portion of your labor expenses. It is another win-win. Also, if the interns do a good job at your company, you can offer them jobs when they finish school. Since they have already worked for your company, you may also be able to save on training costs for them.