The fixed costs of a staffing agreement – bill rate and markup – are negotiated before workers arrive onsite. The typical way to control those costs is to reduce or add to the number of workers, options that can impact a site’s productivity.
There are several other, more strategic ways to control workforce costs and improve efficiency.
Reduce Employee Turnover
Turnover is expensive, time-consuming and stressful. It creates both direct and indirect cost to your program, including the salaries of those who screen and train replacements, additional line supervision of new hires, and safety/risk costs. In addition, new employees may be slow, impacting throughput speed and product quality.
Reduce Headcount/Overtime Burdens
Communication and workforce planning are critical to a cost-effective workforce program. Your teams should be meeting with your staffing/outsourcing suppliers regularly about forecasting, headcount and accountability for overtime.
Cross training your temporary workforce can improve output, build retention and increase morale.
In addition, some managers assume that temporary/outsourced employees are less qualified and capable than permanent ones. That’s a faulty assumption. Stereotyping, adjusting requirements for outsourced workers, or accepting poor behaviors can quickly poison teamwork, impact morale 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 that a full-time employee with benefits. And, offering flexibility can be an effective 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 teams: shift maintenance to the sort line; reassign sorters to help with cleaning. Periodically review your headcount and positions and ask, “Can we do this now with four FTE rather than the six FTE previously required?”
Incorporate New Technology
Workforce technology has improved substantially; it can handle tracking individual performance and keep output and costs in check. Ensure your suppliers have incorporated the latest technology to measure more than just headcount and added software that assesses the production of the system.