80 Ways To Reduce Expenses

Part 1: Labor

Editor’s Note: This is the first installment of a four-part series that will explore 80 ways to reduce operating expenses. In these difficult economic times, these ways could be the difference between having a profitable year and one of significant financial loss. After all, every dollar of reduced operating expense goes straight to the bottom line of an annual profit-and-loss statement. Take these suggestions at face value, or modify them for your agency. Either way, please take a look. Shaving a few dollars here and there might just save a job.

Here are some ways to reduce employee expenses.

There are many well-known and obvious ways to reduce expenses.

For example, it is fairly common knowledge that hiring two or three part-time employees to replace the work done by one full-time employee who has left the organization (due to retirement, another job, termination, downsizing, etc.) will cost less. The hourly wage rate is likely less, and there is also a savings on employee benefit costs.

But take a closer look at your labor expenses. Although some experienced managers may already know about and/or utilize some of the following strategies, these new ideas are worth consideration.

It is important to note though that every strategy presented in this series can potentially have an adverse effect. For example, continuing with the part-time/full-time strategy noted above, several problems may develop. There are additional training and supervisory costs in hiring new part-time employees, there may be a potential for lower-quality work, and the practice may violate a labor-union contract.

Therefore, it is important to weigh the pros and cons of each strategy before implementing it.

1. Sick-leave incentive program. Create a program in which employees can opt to exchange a certain number of unused sick-leave days for a payout at 25 to 33 percent of a salary per day. This is an incentive to employees who continually use sick-leave days for questionable excuses, and often on days when you need them most.

The adverse effect may be that some employees are motivated to come to work on days when they are not productive–or worse–spread the flu or other ailments to other employees.

2. “Personal days” instead of “sick days.” This is an alternative to number 1. Instead of allocating days for sick leave, provide a lower number of “personal days” that allow employees to take off for any reason.

However, if the ratio of personal days is only half as many as the sick days, then you won’t save as much as with a 25- to 33-percent payoff on unused sick days.

3. Staggered-shift scheduling. Track facility daily-use patterns carefully, and note the busiest and slowest times. Then schedule different shifts of employees (combined full-time and part-time) to overlap during the peak times, and reduce during slow times.

An adverse effect may occur if you are wrong and/or use patterns change; you could be caught short-staffed at busy times.

4. “On-Call” staff: For facilities such as theme parks, beaches, and water parks that are weather-dependent, schedule some employees (typically part-timers and/or seasonal workers–not key employees) to be “on-call” on days when the weather forecast predicts inclement weather. Pay those employees one hour’s wage to be available to work if you call them at the beginning of the day.

However, weather can change, so this strategy can backfire. Additionally, some employees may be unhappy with reduced hours.

5. Sending employees home early. This is an alternative to number 3, or can be used in conjunction with that strategy. If the weather turns bad, and/or the expected number of customers does not show up, some of the less vital employees can be sent home early.

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Related posts:

  1. 80 Ways To Reduce Expenses, Part 2
  2. 80 Ways to Reduce Expenses: Part 3
  3. 80 Ways To Reduce Expenses: Part 4
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