Did you know that most employees cost 1.25 to 1.4 times their annual salary? Labor costs are the biggest employer expense, so how can you lower it?
There are several ways to decrease employee business expenses. The solutions range from reduced turnover to better employee expense accounting practices. A few small changes in your business could mean big cost savings.
Keep reading for five tips on how to reduce your employee expenses today.
1. Reduce Turnover
It costs a lot more money to hire new employees than it does to retain them. To reduce the expenses with hiring, you should put turnover reduction practices into place. Offering great benefits and incentives is one way to retain employees.
It’s also important to encourage your team members to take time off when accrued. This will reduce burnout and help increase productivity. Focusing on your employees’ well-being will go a long way with retaining talent.
2. Lower Reimbursable Expenses
Another way to reduce expenses is to control what is reimbursable. You can put programs into place to help track spending. New processes or tools to monitor budgets and expenses can also help you to get a handle on them.
Are you interested in an employee expense reimbursement solution? Check out Bento.
3. Cross-Train Employees
Instead of hiring new employees to do various functions, you can invest in cross-training for your existing team. Of course, this is only if it won’t lead to an overwhelmed workload. Identifying and resolving knowledge gaps with training will help lower the expenses related to hiring and training new employees.
This is also a great way to boost employee satisfaction and morale. Employees like to feel supported and valued.
4. Automate Processes
There are many processes and tasks that can easily be automated. By doing a thorough assessment of your operations and automating where you can, you lighten the workload of your team. When they have more time to focus on the revenue-generating tasks, your company will benefit greatly.
A few examples of automation in the workplace include:
- New hire onboarding
- Customer service
- Social media
- Office activities
Including automation for everyday, monotonous tasks will save time and money. Your team will also be happier because they won’t be stuck doing the boring parts anymore.
5. Outsource Functions
Do you really need a full HR department? Could you outsource your accounting function? What about an outsourced payroll provider?
By outsourcing some of the key functions, you will significantly cut down on costs. You won’t have to have entire teams on the payroll any longer. Outsourcing is considerably less costly than maintaining these functions internally. A Global Employer of Record can make sure these processes are automated through their software.
Discover More Ways to Decrease Employee Expenses
This article discussed how to reduce employee expenses through creative solutions. We hope this inspired you to review your next employee expense report closely to find ways to save! Or to put new automated processes in place to streamline operations.
Are you interested in reading more educational articles? Check out our blog.