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"Cutting Labor Costs? Be Sure You Know What You're Cutting"

Wages and benefits are a small part of your total workforce costs according to Richard Weed, VP, Manpower Solution Sales.

If you’re in a leadership role, you may think you know how to cut workforce costs. But the answer may not be what you think. Why? Wages and benefits make up only about 40% of your total workforce cost.

After working with thousands of clients over the years, we’ve found that the total cost of your workforce could be 1.5 times higher than what appears on your financial statements.

The first step in optimizing, even lowering, your total workforce cost, is knowing what it actually is.

The average company’s costs fall into three main buckets:

• Labor – 40%. These include wages, benefits and talent acquisition costs
• Opportunity – 35%. Costs such as overtime, turnover, unfilled orders and supervisor time
• Hidden Costs – 25%. Items like safety, compliance, unemployment and training

While many companies have an understanding of their labor costs, it’s the opportunity and hidden costs that often are overlooked—but have the power to make or break a business.

Author: Rich Weed, Vice President of Solutions Selling

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