Labor Costs Impact Your Business – And Your Customers Too

by Sharlyn Lauby on March 26, 2013

(Editor’s Note: Today’s post is sponsored by Kronos, the global leader is delivering workforce management solutions in the cloud. More than half of the Fortune 1000 use Kronos to control labor costs and improve productivity. Kronos was recently recognized as Original Equipment Manufacturer of the Year by MicroStrategy Inc. Congrats to them and I hope you enjoy the post!)

Given recent conversation about Best Buy and Yahoo changing their flexible work policies, it only seems logical to talk about the importance of monitoring employee time and performance. Because that’s what this whole discussion is really about – making sure that employees are delivering expected results within appropriate timeframes.

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If a task is supposed to take an hour, companies want to know that it was completed in an hour. If it took two hours, then companies want to know the reason.

Occasional hiccups to processes occur. I remember those winter days when we had to worry about paychecks being delivered on time. Any other time it wasn’t an issue.

Sometimes there’s a breakdown in the process. Information isn’t communicated in a timely fashion and it puts everything behind schedule.

And unfortunately, we do have to acknowledge that human error can create challenges.

Often to help us manage labor costs, we use automated timekeeping systems. Not only does this help us keep track of what’s happening but it allows us to continuously monitor and make adjustments. During my years in hospitality, managers could monitor sales and labor activity to determine if we might need to call someone in for an extra shift or send someone home because it was slow. It also helped us realize the need to cross-train staff that could help out another restaurant or bar at the last minute.

Those things were great because they helped the business be profitable and successful. They helped the manager hit their budget goals.

I recently read a case study from Kronos about how the same exact labor monitoring not only helped the organization but it benefited customers. Valley Power Systems (VPS) is a power solutions provider for engine and equipment manufacturers. They’re based in the Los Angeles, California area and have approximately 400 employees in nine locations.

The challenge for VPS was that the extra time being spent on tasks wasn’t only costing them money…it was also costing their clients. VPS would charge customers back for tasks that took extra time. And let’s face it, none of us like it when we budget a fixed amount of dollars for a project only to discover when the bill arrives that it took longer than expected.

Add to the frustration that VPS was using a manual system to keep track of these chargebacks.

VPS worked with Kronos to develop a solution that met their needs.

  • The automated timekeeping system allowed them to track employees time efficiently. They were also able to track employee breaks and lunches, an important feature for California employers.
  • They also put this system in the cloud, giving managers the ability to monitor time at any moment using their smartphones or tablets. Very cool!

The results were well worth the expense. According to Ramona Fierro, human resources director at VPS, in one year they saved $100,000 in customer chargebacks. You can imagine how happy their customers were.

Fierro also said that by adopting an automated solution, the human resources team saves eight hours per pay period. They’ve been able to take the time they were spending fixing timekeeping omissions and errors to focus on employee training and development activities.

“Training translates into improved morale, which means better productivity”, Fierro said.

If you’re interested in finding that same kind of win for you and your customers, take a moment and check out the Valley Power Systems case study. You can download it here.

Also, stay connected with Kronos by visiting their website, liking their Facebook page and following them on Twitter. Every organization I’ve ever worked with understands the connection between their labor costs and profitability. The talented people at Kronos understand that too.

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