What are you doing about the minimum wage increase? If you are an operator in the food-service, hospitality, retail, or other service-oriented sector, the recent increase in federal minimum wage likely affects your bottom line – the profits at your business.
A number of other articles discuss the impact of this federally mandated change on businesses, including some of our favorites:
- Minimum Wage Hike Could Threaten Low Earners’ Jobs
- With Minimum Wage Set to Rise, Tipped Employees Seek Their Share
- The Dangerous Minimum Wage Mirage
- Local Workers Discuss Minimum Wage Increase
As a business, how do you combat the extra expense of workers? One way is smarter labor management tools that can save you money – like TimeForge. TimeForge can save you 3-5% of your labor costs by improving your staff retention, decreasing turnover, freeing up manager time, and enforcing the labor schedule — all of which provide direct improvements to your bottom line.
Turnover and Retention are important metrics at any business.
- It can cost more than $3,500 to replace a single employee making $8.00 / hour, according to the Society for Human Resource Management (SHRM). This accounts for recruitment, training, interviewing, hiring, reduced productivity, etc… If the turnover at your business is 80% – that means that 16 of the 20 employees you hire in any given year, are no longer with your business. What does that turnover cost your business? 16 * $3,500 = $56,000 in lost profit because 16 employees left. That’s serious money out of the business!
Manager time is expensive, use it wisely.
- Most managers in the hospitality industry take more than two hours to build a labor schedule, every week. With a low annual salary of only $40,000 (below the annual average), two hours weekly is $2,080 in direct manager costs for building a labor schedule. This excludes the time necessary for rewriting the schedules, answering phone calls, updating availability, and all the rest of the scheduling duties a manager needs to do. And while the manager is building schedules, they cannot run the business.
Enforcing the employee schedule has immediate savings.
- Employees commonly ride the clock, clocking in early and clocking out late. Every few minutes adds up. A staff member clocking in early two times a week, and clocking out late twice per week, who earns the new minimum wage of $7.25, will burn through an extra $362.50 per year from the business. With 20 employees, that is more than $7,250 per year, and an additional 20% in benefits, taxes, and other fees. More than $8,700 in extra labor costs.
So, with only 20 employees, the business is likely losing:
- $56,000 in turnover and retention costs
- $ 2,080 in schedule building costs
- $ 8,700 in schedule enforcement costs
- $66,780 in direct labor costs
That is $66,780 in profits that the business is losing. What will TimeForge cost a business with 20 employees?
TimeForge Lite will cost the business about $25 per month, or $300 per year – well below the cost of even a single manager’s time to build a schedule.
TimeForge Max will cost the business about $100 per month, or about $1,200 per year – complete with labor scheduling, accounting integration, attendance monitoring, and everything else needed to properly manage labor.
What happens with five stores? Twenty? Three-hundred? Labor costs go up drastically, the more stores that a business operates.
Use TimeForge labor management software to put money back in the business and save thousands every year.
TimeForge will reduce turnover, improve retention, free up manager time, and increase store profitability at your business! TimeForge employee scheduling and labor management software is used by owners and operators of hospitality, food-service, retail, and other service-oriented businesses around the world.