Controlling Workforce Costs

The cost structure of a workforce service agreement—wage rate and markup percentage—is negotiated based on local market wage analysis and site-specific workforce needs. For companies utilizing outsourced labor agencies, the typical way to control those costs is to reduce headcount or lower wage and/or markup, options that can impact a site’s productivity.

Several other, more strategic ways exist to control workforce costs and improve efficiency.

Reduce Employee Turnover

Turnover is expensive, time-consuming, and stressful. It creates direct and indirect costs to your program, including the salaries of those who screen and train replacements, additional supervision of new hires, and safety/risk costs. In addition, new employees may be slow, impacting productivity, efficiency, and quality.

Reduce Headcount/Overtime Burdens

Communication and workforce planning are critical to a cost-effective workforce program. Your teams should regularly meet with your labor/outsourcing suppliers to discuss forecasting, headcount, and plans to mitigate unnecessary overtime.

Build Morale 

Cross-training your temporary workforce can improve output, build retention, and increase morale.

In addition, some managers assume that outsourced employees are less qualified and capable than permanent ones. That’s a faulty assumption. Stereotyping, adjusting requirements for outsourced workers, or tolerating poor behaviors can quickly impact morale, reduce productivity, and increase risk.

Consider Part-timers and Job Sharing

Consider putting a portion of your workforce in part-time roles when your need is less than a full work week or when a full-time job can be shared between two part-time employees. You can often recruit and retain a part-time employee at a much lower cost than a full-time employee with benefits. Offering flexibility can be an effective recruitment and retention tactic.

Offer Volunteer Furloughs

When work slows down, some sites shift their workforce to “busy-work” until things pick up again. In a strong and loyal workforce culture, you can allow employees to volunteer to leave or take a break when the system is slow and bring those folks back when the opportunity returns.

Manage the Org Chart

As companies grow, inter-departmental communications can be impacted; what’s going on in one department may be a mystery to another. The same task may be repeated in several departments. Managers may become secretive about their headcount to “protect their turf.” None of this is productive. Instead, look at using personnel across various teams or divisions to accomplish key priorities and tasks.  Sharing resources and employees can foster greater cohesion and teamwork across a company. Also, periodically review your headcount and positions and ask, “Can we do this now with four FTE rather than the five FTE previously required?”

Incorporate New Technology

Workforce technology has improved substantially; it can track individual performance and key performance metrics. Ensure your workforce partners have incorporated the latest technology to measure more than just headcount and provide access and visibility into key information.

Managing workforce costs is crucial to efficiently operate a waste or recycling operation and often represents one of the largest portions of an operating budget. An experienced, industry-specific workforce provider can help you create an approach that controls costs and maximizes productivity. When working with a labor provider, ensure their goals support your business’s objectives and offer transparency, predictability, and peace of mind.

Interested in learning more about how an outsourced workforce provider can reduce staffing challenges, increase profitability, and improve productivity? Learn more about Leadpoint and our recruiting and workforce solutions.

About Leadpoint

Since 2000, Leadpoint has specialized in providing recruiting and workforce solutions to customers nationwide. We provide safe, productive, and stable work teams to the waste, environmental, and manufacturing industries, supporting recycling, polymer operations, landfills, transfer stations, and route helpers on collection vehicles. Our outsourced model removes labor complexities associated with recruiting, training, onboarding, and supervising employees, freeing up our customers’ time and resources. Based in Phoenix, Leadpoint aims to streamline operations and enhance business performance with cost-effective solutions designed to meet the evolving needs of the waste and recycling industry.

Editor’s Note: This article has been updated to ensure it accurately represents the latest information from Leadpoint. While the original version was published in December 2018, we have made revisions to provide our readers with the most current insights from Leadpoint. Thank you for your continued support and interest in our content.