Posted on July 19, 2017

Best Practices for Strategic Labor Management

Ineffective labor management is one of the top money wasters in most businesses. From unmanaged overtime to employees with nothing on their plates, inefficient labor management systems can cost you an arm and a leg. There are several practices, however, that help ensure that you have the right employees, the right processes and the right safeguards to protect your future and your bottom line.

The right employees

Having the right employees on your team is a huge step towards a thriving business. Make sure that your hiring process is designed to bring in high-quality, highly engaged employees. Disengaged employees are a huge burden on profits and turnover costs at least $20,000 per employee, so you cannot afford to get engagement wrong.

In addition to conscientious hiring, invest in effective training. Properly trained employees are more efficient, getting work done faster and avoiding overtime expenses. If you find that sometimes your business needs some extra help, instead of paying overtime consider temporary workers--they will not be sitting idle (and costing you money) when business is slow.

The right processes

Once you have the right employees in place, make sure you have effective practices for them to follow. This starts by providing challenging but manageable work for employees to keep them engaged, but to avoid the chance of overtime and burnout.

There have been many advances in technology to help with labor management in the past few years. By using time and attendance tracking as well as custom reporting tools, you can make sure your employees are working efficiently.

The right safeguards

Through this new technology, you can ensure that hours and wages are tracked accurately; correct time and attendance tracking can help you avoid the risk of costly lawsuits. Since you can still be held accountable for any overtime due if an employee misreported his or her hours, consider a more accurate tracking and reporting system using a PC or biometric time clock. Also, keep detailed records of any times you and the employee disputed hours worked--in case of a lawsuit, you will need documentation to prove your side of the story.

Employee classification and state and federal laws change all the time, so regularly auditing your practices to make sure you’re compliant assures violations don’t slip through the cracks. Mistakes in overtime reporting could end up costing you thousands or sometimes even millions of dollars.

Making sure you have highly engaged employees following efficient processes will make your company as effective as possible. And making sure that you are reporting hours and overtime correctly will protect the future of your company from the growing frequency of wage and hour lawsuits. For more tips on mitigating compliance risk and to see where your organization stands, review our in-depth checklist.


Sources: MoreBusiness, Workforce


This content is intended for educational purposes only and should not be considered legal advice.