Posted on by Jessica Peaty

How Labour Optimisation can be essential when staff costs increase

Businesses in the Hospitality and Retail sectors have been begin feeling the pinch from the rising cost of overheads and operating costs especially increases in the National Living Wage and National Minimum Wage.

That National Living Wage will increase by 4.1% in April 2017 to £7.30 and is set to increase to over £9 by 2020 according to Government policy.  For employees under 25, the National Minimum Wage will also be increasing from April.

Effective deployment of staff can not only help reduce costs, it can also help increase revenue during periods of peak demand where additional staff would improve service, enhance the customer experience and drive-up sales.

If your business has a high percentage of hourly paid employees then time literally is money.  Every extra staff hour on the rota will come at a cost.  It is important that managers responsible for defining a staff rota are working to labour cost budgets.  These budgets can be based in staff hours or staff wages and linked to a metric that best suits your type of business such as sales, covers, occupancy, footfall, etc.

Once labour cost budgets have been defined for each trading period, it is vital that managers are able to clearly see the actual costs and variance to budget in real time as staff hours are added to a rota.  This enables managers to make proactive decisions before the fact rather than reacting to an overspend after the fact.  It’s the difference between working out you’ve had a problem when it’s too late to do anything and seeing you will have a problem when there is still time to do something about it.

You’re now in a good place by having implemented the tools for effective budgeting and costing of staff on a rota.  The next area to consider is smarter deployment of the staff hours to best meet customer demand and sales opportunity.  Labour Optimisation functionality will help by analysing the historical activity within your business and overlaying the lessons learned onto upcoming rotas with safeguards for minimum staffing levels.  This allows managers to use real data from your business to better understand the demand curve and apply that to staff rotas going forward.

Labour Optimisation is not just about reducing staff hours to reduce costs, it’s also about predicting when more staff should be on the rota to maximise revenue opportunities and generate growth.  A good system will allow you to do both so it’s win win.

Selima’s popular cloud-based HR and Staff Scheduling software now includes best-in-class Labour Optimisation functionality.  The system has been developed with considerable input from industry experts to help deliver a solution that is powerful yet extremely easy to use for busy managers.

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