Time and Labor Management

December 21st, 2022

“Management” refers to the processes businesses use to organize, monitor, and utilize their resources. In the case of time and labor management, the resource of interest is a company’s labor force.

The primary goal of time and labor management is to keep labor costs to a minimum.

Some of the most-used methods include app-based timekeeping, GPS-based employee location tracking, time and labor calculators, and various other labor tracking software.

Why is there a need for time and labor management?

Labor-based industries’ need for a flexible and contingent workforce is and has been the primary driver of the development of time and labor management solutions.

The uncertainty inherent in many of these industries - construction, manufacturing, transportation, landscaping - requires flexible hiring solutions. Production supply and demand is ever-changing, and the workforce to deliver that supply must match that.

The ability to quickly adjust workforce numbers can be a business’ best bet to navigating an uncertain environment.

Changing government regulations and the economic uncertainty they bring also represent significantly influential factors in the supply and demand of a workforce.

The best time and labor management have been specifically developed with the goal of optimizing a workforce. Increased efficiency in your workforce represents arguably the most significant opportunity available to increase your business's bottom line.

Time and Labor Management Fundamentals

There are certain fundamentals of time and labor management that should be of primary consideration when optimizing your labor processes.

1. Hire Quickly

A workforce that must match the variability of the labor market requires a quick and efficient onboard process. Ensure there are no hiccups in the hiring process to minimize any impediments during busy hiring seasons.

2. Consistently Audit and Simplify Processes

Every increase in efficiency is a potential saving. Don’t be afraid to adjust processes to respond to seasonal or otherwise fluctuating business demands.

Your business’ labor needs will likely change often. Simple processes, easily implemented and removed, will save you time, money, and headache when dealing with a large labor force.

Time spent learning practices is time not spent completing billable work.

3. Test New Implementations Within an Enclosed Environment

Accessing a new and exciting new technology with the potential to save your business money can make it very tempting to be a little too ambitious with implementation.

But the time lost in productivity should one of these technologies fail can significantly limit any benefits.

Implementing new labor management practices within a limited, contained environment, before upscaling slowly and cautiously, can limit the risk associated with implementing or adjusting business development strategies.

4. Clearly Define Expectations and Execution of Labor Management Practices

Developing the trust and security your employees feel towards your company and their managers is key to retaining talent.

Clearly expressing and defining your company’s expected labor practices reduces the chance of labor disagreements and litigation.

Defining labor management practices and implementing them within labor management software can ensure your company stays on the right side of complicated compliance regulations.

Time and Labor Management Challenges

There are several traditional challenges to managing a labor force, and as the industry and demands placed on labor evolve, many more will likely arise.

One of the currently most pressing challenges within the workforce is a shortage of skilled workers. An ability to find workers possessing the necessary skills to perform a job brings great uncertainty to the hiring process.

Another challenge is simply the difficulty of managing a large, often mobile, workforce. Complicated and confusing time-keeping methods risk wasting valuable time on the onboarding process. Keeping track of a labor force across and between multiple job sites remains a constant headache for dispatch operators. Discrepancies in time tracking and mileage logs can represent potentially significant revenue losses.

Scaling a business, whether seasonally or permanently, represents another significant challenge for labor-dependent businesses. Maintaining effective time and labor management practices at scale is challenging even when implementing the most up-to-date labor tracking offerings.

Another challenge, that ties into scaling complications, is the inherent seasonality of the majority of labor-dependent businesses. Companies in these industries must be able to adjust their workforce depending on demand. The cost of labor cannot outpace payments received for services, which means businesses must often rely on flexible and contingent workforces.

Contingent Workers

Contingent workers, also known as independent contractors, 1099, or gig workers, offer their skills and expertise to businesses on a project-by-project, or otherwise short-term, basis.

Often, the work is only guaranteed up to the completion of a specific project or the length of an agreed-upon contract.

This method of employment is optimal for businesses that must scale with demand, as well as businesses that rely on contingent workers to bridge skills gaps within their teams.

Additionally, for some businesses, the financial and administrative overhead associated with hiring employees may represent too significant a burden.

This contingent method of employment has been steadily increasing for at least the past decade. Somewhat surprisingly, recent studies have indicated that the majority of contract workers are actually freelancers by choice, rather than due to not being able to find full-time employment.

Which industries rely the most on a contingent workforce?

There are many different reasons for an industry to rely on a contingent workforce, many of which you can find listed above.

However, to be specific, industries that rely on a wide array of skilled and unskilled labor to perform assembly, maintenance, and repair, generally make the greatest use of contingent workforces.

These industries entail construction, manufacturing, maintenance and repair, plumbing, HVAC work, and IT and retail field services. Companies in these industries prefer to hire contingent workers over permanent employees due to the flexibility and financial benefits the method offers. As production supply and demand fluctuate, procurement of labor can be easily adjusted.

These industries, and many more, will only continue to look outside of traditional employment arrangements as the demands of rapid hiring increase.

The Challenges of Working With a Contingent Workforce

Working with a contingent workforce is not without its own challenges.

Trying to keep track of a large, multifaceted, and often multilingual workforce means organizational skills and efficiency are of utmost importance.

As mentioned, potential lost revenue due to unreliable timekeeping and mileage logs can be devastating to a business with narrow margins. While a lack of efficient route planning and optimization can mean significant time wasted on travel. Poorly organized payroll processes risk getting swamped by swells in labor forces, regardless of whether they still rely on outdated paper-based timecards and timekeeping methods.

In order to fully optimize a workforce and ensure maximum performance efficiency, businesses must have as comprehensive an understanding of their labor as possible.

Luckily, over the years, there has been significant development of time and labor management software to meet these needs.

Time and Labor Management Software

As the complexities of labor management have increased, it’s become almost impossible to maintain organizational efficiency without the use of time and labor management software tools to assist the labor management process.

These tools can eliminate the complexities surrounding employee schedules and attendance. Often offering the ability to filter your employees based on availability, training, and overtime, enabling you to schedule the most qualified and profitable team for the needed job. Ensuring you’re able to put the right people on the right jobs, at the right time.

Time and labor calculators also ensure that no one has to waste their time performing complicated calculations to determine hours worked, overtime, mileage, or other computations.

The simplicity and effectiveness of this software also allows you to enforce your company’s specific rules and requirements when it comes to labor management. While consistent document and policy enforcement with automated tools and tracking can help ensure your company’s compliance with complicated governmental regulations.

One of the greatest benefits of time and labor management software is its ability to help business owners control labor costs while improving productivity and service. Effective software can be incredibly useful in organizing schedules, managing over- and under-staffing issues, monitoring overtime and time off, and much more.

The use of time and labor management tools offers transparency and flexibility to your employees while providing you with beneficial insights that will help you make better decisions regarding your business.

The benefits of time and labor management tools are clear. The only question that remains is which you’ll choose to help improve your business's bottom line.

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