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4 tips to reduce your labor costs

May 24, 2017

The following article was contributed by Carol Wood, People Operations Director at Homebase. Read more employee management posts from Homebase and other Staffing & Human Resources articles here on the Clover blog.

Aside from inventory costs, labor costs are usually one of the largest expenses for a business. This is especially true if you’re a brick and mortar location that needs to staff people throughout the day, even during the slow periods. Add local regulations on top of that, like New York’s Spread of Hours rules, and managing labor costs can become a real headache.

But don’t worry—there are a few ways you can keep your labor costs under control, especially if you’re using modern team management software like Homebase. Here are a few ways:

1. Use prior sales data to help you determine when to staff

Look at sales data when you’re scheduling so you can be sure you aren’t overspending on labor during your slow periods. When you connect your point of sale system, like Clover, to your scheduling software, like Homebase, you’ll get all the data you need in one place. Looking at the last few weeks of data, you’ll get estimates of sales for a given shift, so you can keep your labor cost percentage in check.

2. Pay attention to the weather

This is especially important if you’re a business that relies heavily on foot traffic, or if you have a large outdoor seating area. Inclement weather can dramatically change your business. When you’re scheduling with Homebase, you’ll see the weather forecast right alongside your estimated sales and wages, so you can minimize your surprises. If there’s a cold front coming through, you’ll probably want to schedule fewer staff at your ice cream shop, or if it’s raining, you may need fewer team members at your store that day.

3. Track overtime closely

This is a no-brainer, but it’s always worth repeating. Using software like Homebase can make it really easy to track hours worked, even for the same employee across multiple locations. As you’re scheduling your team, you’ll see warnings for employees that are scheduled for more than forty hours (or the maximum number of hours you’ve set), and as the week unfolds, you can also get text message warnings as employees are about to hit overtime.

4. Limit early clock-ins

You might’ve seen this referred to as “time theft” before, but oftentimes it’s just an employee clocking in a few minutes early. Over time, though, this can add up to hundreds or even thousands of dollars every month. With a time clock app like Homebase, you can prevent early clock-ins entirely, because your employees won’t be able to clock in until their scheduled shift starts. And at the end of the shift, we’ll also let them and you know if they forgot to clock out, so you can limit your overtime exposure.

Here’s the good news! Most of these labor cost controls are pretty straightforward, and they’re simple to implement when you use software like Homebase for scheduling and time tracking. Once you make the switch, you’ll start seeing the savings almost immediately.


Carol is People Operations Director at Homebase. With free online tools and mobile apps for managers and employees, Homebase eliminates the paperwork and headaches of schedulingpayroll, and team communication for local business.

At Homebase, Carol focuses on providing thought leadership, tips and tricks, and scalable HR solutions for the 50,000 businesses that Homebase serves. Prior to Homebase, Carol focused on helping small and medium businesses navigate the tricky waters of human resources, working with companies across the retail, food service, oil and gas, and healthcare industries through her roles as HR Director at Fuddruckers and Achilles Group, a Houston Based HR consulting firm. In her free time, Carol enjoys spending time with her son Dayton, and watching Alabama football (RTR).

[image: Punching in, pt. 1 by Marcin Wichary on flickr]