Labor management describes the many processes businesses use to organize, implement, and optimize the use of a labor force.
A labor force is any number of employees - full-time or contract workers - currently working or available to work in exchange for compensation. The term workforce is also used, but more commonly refers to the work market in general rather than a specific group of laborers.
The goal of labor management is the maximization of labor performance at a minimized cost.
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Labor Sync's Guide to Labor Management
The most significant classification of labor can be made by the type of contract an employee signs with an employer.
Full-time employees are generally hired on an indefinite basis and expected to work at least 30 hours a week.
As a condition of employment, these workers commonly receive a salary as well as additional benefits like health insurance, matching investments, retirement options, and more.
In 2014, the Affordable Care Act established full-time employees as those who, “for a calendar month… average at least 30 hours of service per week, or 130 hours of service per month.”
Part-time employees perform their salaried tasks on a reduced schedule - averaging less than 30 hours per week. The limited hours of these employees often prevent them from qualifying for many of the benefits achieved by full-time employees.
Businesses whose labor demands fluctuate seasonally - such as landscaping, lawn care, snow removal, resorts, and amusement parks - make significant use of part-time employees.
Technically, these workers are also part-time employees.
However, this form of agreement creates what can be called contingent workers - employees hired to provide services related to the completion of a project or task. Once the task or project has been completed, the contract is terminated and the worker must seek out another job.
Operating as independent contractors, these workers offer their services on a job by job, project by project, or otherwise limited basis. Work is only guaranteed up to the completion of the project.
It’s important to note that just because a contract is limited does not necessarily mean completing it will only take a limited or short amount of time.
This style of employment is common for businesses that must scale depending on demand, in particular, seasonal industries.
But it’s not just seasonal industries - the use of contract workers has been increasing for the past decade, with recent studies finding the majority of contract workers are actually freelancers by choice.
This classification of employee is extremely common for businesses that must scale depending on demand and seasonality.
A business’ decision to use full-time vs. part-time or contract workers can depend on a wide variety of factors.
For jobs that require high skill and require long training periods, it makes sense to use full-time employees to try to limit the amount of training time. While a job that requires the rapid hiring of multiple short-term workers could look to the ease of hiring independent contractors. Relying on contract laborers can ensure a company doesn’t get stuck paying employees when there isn’t a job to be done.
While not required by law, many companies offer significant benefits to their employees in order to stay competitive with hiring candidates. The tradeoffs must be considered, but the cost of providing benefits to employees can represent a significant financial burden on a business.
➡️ For some more insight into the use of contingent workers, check out our blog on Time and Labor Management.
The processes involved in the management of a workforce can be categorized by the general purpose of the process.
These processes and practices developed over time as solutions to the various challenges inherent in ensuring the productivity of a managed workforce.
The first step in the process of using an organized group of workers is the finding, hiring and onboarding of those workers.
For many large organizations, the ability to identify and fill needed positions quickly and efficiently is of the utmost importance.
Companies must figure out what they need to get done, estimate how many workers they’ll need to get it done, and then find, negotiate, and hire the right ones - all before the job even begins.
Organizations must develop reliable hiring practices that can be replicated easily and as needed.
The faster and more reliably the hiring process can be executed, the faster employees can start actually working.
Once a workforce has been established, the next major challenge involves the planning, scheduling, and logistics of actually getting workers to a location where the job can be completed.
Processes of organization help identify available employees and can quickly match a skill set to the job that requires it. Advanced data allows these processes to reduce costs through a focus on improved efficiency. Solutions to these challenges can ensure that the people and the tools needed to complete a task arrive at the right place and as quickly as possible.
An effective system of route optimization can ensure workers, tools, and machinery spend more time where they’re needed and less time getting there. While an effective scheduling system can maximize the number of projects that can be completed within a given timeframe.
The timekeeping and payroll processes are those for which reliability is of utmost importance.
These are the processes that fulfill the agreement at the heart of a labor contract. Timekeeping and payroll systems are processes that track and monitor time worked and payments made, ensuring that all parties involved are fulfilling their side of the deal.
Effective systems ensure workers get paid for their services and that businesses only pay for services they were provided. Ideally, timekeeping processes also foster employee accountability by eliminating uncertainty and confusion around wages and payments.
One of the most common timekeeping processes involves the use of time clocks. Time clocks are used to track the time an employee is expected to be working for an employer. They are also an important tool in tracking worker productivity.
Timekeeping methods must be secure, reliable, and compliant with local and federal labor regulations. Many of these systems offer instantly accessible data that can be used to settle disputes and assess performance.
Human resources are the processes and procedures businesses put in place to manage the relationships and disputes between employees and their employers.
The procedures involved in HR are generally used to resolve and/or avoid disputes and other issues that could lead to costly lawsuits, settlements, or other disciplinary actions. HR aims to minimize the need for external involvement in the affairs of a business.
Human resources can also minimize the risk an employee faces when bringing up grievances with a company. Many human resources processes attempt to provide a voice or channel with which employees can communicate openly with their employers.
Human resource procedures aim to reduce risk - both for your reputation and finances - to the businesses that utilize them.
While this does not necessarily refer to any specific labor management processes, it’s important enough that we should include it here.
Cost is often the single most important determinant of what a workforce can achieve. Nearly every labor management process entails some attempt to minimize costs. This is most often achieved by maximizing the efficiency of processes.
The less time doing anything not directly related to the completion of a job, the better.
Profits are determined by a business's ability to control labor costs. And keeping labor costs low relative to the payment for work is a business’s primary method of increasing revenue. If a business can perform a task for less than it’s being paid, the difference is profit.
The value of a business’s offer towards the completion of a task relies fundamentally on the cost of its labor.
➡️ Check out our blog for more on “What Should Labor Cost Be?”
There can be a nearly infinite amount of factors that affect the overall cost of labor for a business. And companies will always need to strike a balance between the quality of the labor they employ and the cost it requires to employ it. Employers must determine the cost they are willing to pay to maintain a certain level of quality in their execution of work.
The more skills, education, and experience required to perform a job often correlate to a higher cost to fill that role.
Specialized skill sets require an investment of training and experience that gets included in the wages offered.
Meanwhile, a job requiring a more simple skill set should be easier to fill, at lower wages, because the pool of workers capable of completing the job is larger and that competition favors an employer. When a position must be filled from a limited pool of workers, the competition to attract employees often leads to more lucrative offers.
Businesses have to pay for the skills they need their workers to possess.
And because an employee’s work is representative of the company itself, many organizations will often pay more for better quality work, in particular, if the goal is to improve the company’s reputation.
The location where a business operates is another significant factor on a company’s labor costs. In economically depressed areas with struggling local economies and low costs of living, companies can hire labor more cheaply.
However, factors such as a strong local economy can also serve to attract more skilled workers to an area, making it easier for businesses to find suitable employees.
Additionally, some companies must offer financial incentives and other benefits to entice necessary employees to relocate, or otherwise assist with transportation expenses.
Closely tied to the demands of a position as well as the location necessary to perform the work, is the supply of available labor.
When supply is low, laborers can demand higher wages and companies must make competitive offers. But when supply is high, employers can easily fill their needed roles.
Supply and demand, especially in dealing with a contract workforce, is extremely susceptible to seasonality. Certain seasons, such as the Christmas holidays for retail, require significantly more workers, making it harder to fill positions during that time.
A worker is only as good as his tools.
And no matter how fast and efficient your workers may be, if the tools and machinery they need to do their jobs function poorly, it’s going to slow them down.
Limit the time it takes your workers to complete their tasks by ensuring they have the proper tools to optimize their performance.
Over the years, many companies have developed what are referred to as solutions to many of the challenges inherent in labor management.
These solutions operate as tools that improve the efficiency and increase the potential for a business’s success in completing a job.
Because timekeeping and payroll processes are so fundamental, they are often included in what is sometimes referred to as time and labor management solutions.
Labor management solutions exist in many forms. They can be software, hardware, or even a repeated methodology or behavior.
Many current labor solutions operate as apps on mobile devices. The portability, adaptability, and flexibility of the mobile apps allows them to be deployed in nearly any work environment. Apps can act as time clocks, safety reminders, productivity and performance trackers.
The data these apps provide and its effective usage can mean the difference between success and failure in a competitive industry.
Also referred to as workforce management software, labor management systems are software solutions designed to manage human labor most often within a warehouse or distribution center. These software infrastructures can be utilized in warehouse settings to track employee productivity and other performance related metrics.
The value of this software is often realized in the form of innovation driven by the data the technology can amass. Rather than depending on unreliable data from supervisors tasked with trying to monitor employees using paper, pen, and stopwatch, these systems use technology to drive productivity.
Workforce management software offers labor productivity tracking solutions that focus on ensuring a warehouse production environment is operating at maximum efficiency. The software compiles employee data throughout the day before using that data to optimize the human assets involved.
Software can be used for creating schedules and tracking employee time and attendance, while a more advanced system can offer labor forecasting and meaningful analytics based on industry benchmarks and machine understanding.
🤔 Learn More: What is the best labor productivity tracking solution?
Time and labor management software is designed to optimize the processes of labor management involved in timekeeping, payroll, scheduling, dispatch, and billing.
Many of these take the form of an employee tracking app. And their goal is to accurately track the time and location of employees while they’re on the clock.
🕐 Check out our Labor Tracking Guide
Labor tracking software monitors employees while they are on the clock.
Sometimes referred to as GPS or time tracking, the technology is particularly suited to improving the performance of a mobile workforce.
These mobile workforce solutions can be used to organize employees, estimate costs, schedule jobs, and monitor productivity.
➡️ Read More: Labor Tracking Software
GPS tracking apps allow employers to track employees, machinery, and fleets to know where they are at all times throughout the workday.
📍 More details: Top Benefits of a GPS Tracking App for Your Business
Often in the form of easy-to-use apps, these solutions provide easy-to-use methods of employee timekeeping, such as clocking in and out of the click of a button, batch entry for supervisors, and simplified and instantly accessible record keeping.
🦺 Learn more: Pros and Cons of Employee Tracking
Scheduling technology is designed to optimize the scheduling of jobs and making sure to fill positions with the best possible employees who can get the jobs done quickest.
These apps can track which employee has what skill and where that employee is at any time.
This type of software can be extremely beneficial when used for landscape crew scheduling. Lawn care businesses often benefit as well.
The purpose of labor laws is to maintain and control the relationship between employers and employees. While “labor law” is often associated with the entirety of employment laws, it is also often used to refer to a group of laws that affect collective bargaining rights and unionization of employees.
There are numerous federal and state laws in place to govern labor relations. Compliance with these laws is of utmost importance to businesses utilizing labor - whether unionized or not. Companies should aim to avoid unnecessary legal fees and fines by staying abreast of the current labor and employment laws and regulations.
There are many different parties involved in creating the rules and regulations guiding the use of organized labor.
Make sure to always check with both local and federal authorities to ensure a business is operating in full compliance with all applicable regulations. Acceptable practices and behaviors can change and businesses must be prepared to adapt to these changing guidelines.
The United States Department of Labor is an executive department of the federal government responsible for the administration of federal laws pertaining to occupational safety and health, wage and hour standards, unemployment benefits, reemployment services, and economic statistics. The DoL is headed by the Secretary of Labor.
The Department’s stated mission is to, “foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions, advance opportunities for profitable employment; and assure work-related benefits and rights.”
The DoL is committed to providing customers with clear and easily accessible information on how to comply with federal employment laws - known as compliance assistance.
The FLSA establishes minimum wage, overtime pay, record-keeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments. This act establishes a federal minimum wage, overtime requirements, the definition of “hours worked,” and provisions against child labor.
The DoL offers a helpful State and Local Government Self Assessment Tool on their website to help employers comply with the provisions of the Fair Labor Standards Act.
The National Labor Relations Board is an independent federal agency created in 1935 to fulfill the functions and responsibilities of the 1935 National Labor Relations Act.
The focus of the agency is to safeguard employees’ rights to organize, their rights to pursue better working conditions and to choose whether to utilize a collective bargaining representative to negotiate or refrain from negotiating with an employer.
The National Labor Relations Act of 1935 empowers the agency to supervise elections for labor union representation as well as to investigate and remedy unfair labor practices.
The NLRB consists of five members appointed by the President, with Senate consent, to five-year terms. Terms are staggered so that one member’s term expires each year.
The NLRB also includes an independent General Counsel, appointed by the President for a four-year term with the Senate’s consent. The General Counsel serves as investigator and prosecutor for unfair labor practice cases, while the Board serves as a quasi-judicial body.
The National Labor Relations Act, also known as the Wagner Act, was passed in 1935 and made clear the policy of the United States is to encourage collective bargaining by protecting workers’ full freedom of association. The Act aims to balance the “inequality of bargaining power” that exists between employers and employees.
The Act guarantees employees at private-sector workplaces the right to seek better working conditions and the ability to designate representation without fear of retaliation. It also guarantees the right of private sector employees to take collective action, such as strikes. The Act protects most employees whether a workplace is unionized or non-unionized.
The NLRA designates the National Labor Relations Board as its implementing agency.
The Labor Management Relations Act of 1947, also known as the Taft-Hartley Act, made significant changes to the NLRA by severely restricting the activities and powers of labor unions.
The act outlawed discrimination against non-union members by union hiring halls and businesses or establishments that hired only union members. A provision of the act allowed states to pass “right to work” legislation that outlawed union shops.
A right-to-work law gives workers the right to work without joining a union or being unionized.
One of the most significant provisions allowed the President the ability to appoint a board of inquiry to investigate labor disputes in instances where a strike might endanger the public’s health or safety. If this board determined the public was at risk, they could then see a federal court injunction to prevent or block any strike action from taking place or continuing.
The Labor Management Reporting and Disclosure Act of 1959 (LMRDA) was passed to improve protections for individual union members. The Act was passed in response to revelations of corruption and undemocratic practices widespread across many unions during the mid-to-late 1950s. The LMRDA covers workers and unions in the railroad and airline industries, who are covered by the Railway Labor Act rather than the NLRA.
Unions must hold periodic secret elections, reviewable by the Department of Labor. Union members are guaranteed the right to a secret ballot on union issues including dues, constitution, bylaws, and membership.
A union member bill of rights protecting members against abuses and guarantees freedom of speech and recurring secret elections of officers.
Unions must submit annual financial reports to the DoL.
Union officers must act as fiduciaries in handling assets and affairs of the union.
A mandatory process must be followed before a member could be expelled or subject to other disciplinary action.
The goal of time and labor management is to help business owners optimize labor productivity while controlling its costs. The increased efficiency of effective solutions carries the potential to change a business’s entire operating outlook.
Management solutions can stabilize timekeeping, organize schedules, prevent staffing issues, avoid overtime, and so much more.
These tools provide transparency and flexibility to employees while keeping the entire employment dynamic safe and compliant. Beneficial insights drawn from gathered data can drive unlocked or unrealized productivity.
The benefits of labor management are clear. And the tools to effectively execute that management are more helpful than ever.