The employee is the heartbeat of any business. They drive your sales, carry out the labor, and ensure that everything is running smoothly in the business. This is why proper employee management is important for any business, and if your business involves a large number of hourly employees, then a proper time and attendance system is also a must to manage the labor of your business.
Scheduling is a huge part of managing hourly employees, as every employees’ own obligations outside of work vary greatly. This can complicate things as creating a consistent and reliable schedule while also allowing for flexibility can be challenging.
This week we wanted to talk about the importance of setting up a proper time & attendance system for your business, calculating your gross revenue to payroll percentage, and some of the challenges that come with managing your employees’ labor.
Benefits of Building a Time & Attendance System
Labor can be one of the biggest costs of running a business and often accounts for as much as 20 to 40 percent of costs in more labor-intensive industries like retail, restaurants, or theme parks. This is where using a time & attendance system can be beneficial in tracking how much you spend in labor and visualize where you are over or under spending in labor.
Ideally, you only want to be hiring the employees you need for your business’s labor needs, under or over hiring could have some serious negative impacts on your business’s profits. Any seasoned manager also knows that you need to hire just a few more employees than you actually need to account for employees who will inevitably phone in sick, quit, or become unable to work for other reasons.
Calculating Gross Revenue to Payroll Percentage
This is where a scheduling system that you run in house, or outsource, can come in handy in allowing you to calculate your gross revenue to payroll percentage. Take the number of your payroll costs from your time and attendance system then divide by your gross revenue into a percentage. So, say if your revenue is $500,000 and your payroll is $100,000, then your payroll percentage would be 20 percent of your total revenue.
Challenges in Labor Scheduling
We’ve put together a list of some of the biggest challenges that come with managing labor. The good thing about every one of these challenges is that they can all be solved with a proper time & attendance system:
Are you having issues with managing your employee labor? Do you find that your labor costs are eating into your profits? Have Pinnacle handle your time & attendance systems to better manage your labor. We provide a state-of-the-art system so you can focus on what matters—growing your business!