Labor Management. NOW Simple.

A salaried staff member is one who is paid a set amount each week, month, or year, rather than being paid per hours worked. Though putting an employee on salary (or declaring them exempt) can have major benefits for both your business and for the employee, there are some analytical problems that are created by having salaried employees.

Labor percentages, which compare the budgeted (scheduled or theoretical) cost of labor to the actual (clock ins/outs or attendance) cost of labor, can be complicated by salaried employees because the amount they get paid each pay period can fluctuate from the scheduled cost (estimate), due to vacation time and other variations in work time. Salaried employees can also make daily labor reports complicated because their fluctuating hourly wage is variable based upon the number of hours that they work.

TimeForge can help you accurately track your labor percentages even if you have salaried employees by simply changing a couple of settings.

Labor Percentages with Salaried Staff

Below is an example of a salaried employee and the analytical problems that are related to salaried employees. Salaried employees can make weekly labor reports complicated because their weekly pay rate can fluctuate. Imagine:

• John gets paid $52,000 annually, which breaks down to $1,000 per week. ($52,000 annually, divided by 52 work weeks in a year, is $1,000 per week.)
• But what if John takes two weeks of vacation this year, so he only works 50 weeks this year? Well, then we can say that John gets paid $1,040 per week. ($52,000 annually, divided by 50 work weeks this year, is $1,040 per week.)

So does John cost $1,000 per work week or does he cost $1,040 per work week? This 4% difference could skew your business’ labor percentage reports.

Salaried employees can especially make daily labor reports complicated:

• So, if John works 52 weeks per year, and he is scheduled for 40 hours per week, we can say that he is paid $26 per hour.
  ($1,040 per week, divided by 40 hours, is $26 per hour.)

• But, what if John is only scheduled for 20 hours one week? Then we can also say that he is paid $52 per hour, for that week. ($1,040 per week, divided by 20 hours, is $52 per hour.)

So how much money should be reported as John’s labor costs? Does John cost $26 every hour he is at work, or does he cost $52 every hour he is at work? This could really skew your daily labor percentages!

You can see why salaries can cause so much trouble with labor percentages. So, how do you deal with these problems, so that you can accurately track theoretical vs. actual labor costs?

Scheduling Salaried Staff

You need to decide whether you want to see John’s hours in your labor percentages. You can choose not to see them at all, or your can modify the way that you see the hours so they aren’t as variable.

Consider whether your salaried employees clock in when they are at work. If they do clock in, you can set their pay rates as hourly rates instead of salaries – regardless of how you pay your staff (that’s a separate function). This way, fluctuating hourly wages would always be a set amount, so you wouldn’t need to worry about a surprise high cost in your labor percentage reports. If your salaried employees don’t clock in, you can set the hourly rates to $0, or change your option settings to automatically copy a salaried employee’s scheduled hours to his or her attendance.

TimeForge Labor Management can improve your profits by 3-5%, often paying for itself in the first week alone, offering instant ROI for your business! Sign up for your free trial of our employee scheduling software today!

Still not convinced? Read what other TimeForge users are saying!

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Do you want to be able to track salaried staff members from within Dinerware Point of Sale?   TimeForge now supports employees who are salaried / full-time from within Dinerware , so you can track full-time employees, as well as hourly / part-time staff.

To enable support for salaried staff members, first make sure you are running the latest TimeForge-Dinerware Bridge software.   Then, while inside of Dinerware, open the employee, and edit their positions / job codes.   Set the hourly payrate and the overtime payrate to be $0 / hour, and then save the information.   Run “Synchronize Now” in the TimeForge Translator, as well as the TimeForge Connector (or, just wait for the two systems to automatically synchronize themselves).

Now, you can log in to TimeForge, and go to the employee list.   Find the staff member you modified, and edit their account.   Scroll down to the list of employee positions, and you will see that you can change the payrate / payscale for this employee , it is no longer controlled by Dinerware.   You can now set TimeForge to export a fixed rate, or fixed hourly amount, when the payroll export is run , regardless of any timepunches within the Point of Sale system.

These employees will still need to clock in / out inside of Dinerware, but these time punches will be ignored for the purposes of running payroll reports on TimeForge.

TimeForge reduces turnover and improves retention while freeing up management time and increasing 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.

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Managers are More Expensive than Non-Salaried Staff

In many industries including retail, hospitality, food-service, hotels, and manufacturing, salaried management staff are usually several times more expensive than non-salaried staff at the same business. In many cases, one member of the salaried staff can be more expensive than five or six non-salaried staff members. In addition to their hourly-wage, managers are eligible for benefits such as life insurance, health insurance, expensive overtime, or additional perks like free food or discounted merchandise rates.

Schedule Managers to do Management Tasks

Businesses should ensure salaried managers perform managerial tasks while on duty, and leverage non-salaried employees for work-related duties that do not require a manager. Some tasks that managers may be charged with during a regular work day could include performing quality control, placing vendor orders, building employee schedules, training employees, processing payroll, and working with customers. Whatever management does while at work, make sure that it is something that is representative of their cost to the business.

Managers should be able to jump in and work when other non-management staff members do not show up for work or unanticipated spikes in demand require more line workers. This ability implies that the business does a good job of cross training employees, and the business is not overly reliant on any one staff member. However, if it is common practice for managers to mop the floors or clean bathrooms because other staff members do not show up, than a re-evaluation of hiring and staffing practices is recommended.

Managers are routinely asked to create efficient schedules for their business on a weekly, bi-weekly, or monthly basis. Accurately scheduling the work force several weeks in advance provides employees with a defined work schedule and allows managers to estimate upcoming expenses (payroll is often the largest expense in retail, restaurant, hospitality, and similar industries). During the process of preparing an accurate schedule, managers will check employee availability, review request logs, consider federal/state/local and corporate regulations, update employee work preferences, revise employee capabilities and training, make overtime considerations, ensure minimum work hours all while maintaining budgets and other business requirements. The entire schedule process commonly occupies a manager for 10% of every week, costing the business at least several hundred dollars each week!

Changing the Employee Schedule Uses Manager Time, Which is Expensive

In addition to creating the schedule, managers often change the schedule on a daily basis. Employees may become available (and want more shifts), suddenly be unavailable (illness or termination) and not able to work, or forget when they need to be at work. Shift swapping is also common in many industries and requires a manager to spend time on each trade , employees give up shifts that were assigned to them originally, or pick up shifts that others cannot work. A shift or request log may be used for employee initiated shift trades. Managers cannot monitor theft, interact with customers, train employees, or perform quality control at the business if they are in the back-office working on a labor schedule.

To ensure that management staff time is spent appropriately, use technology tools to perform tasks that can be done by computers. Software tools such as TimeForge improve staff retention, and decrease the amount of time that scheduling labor consumes. TimeForge includes a number of additional tools that will assist managers in time management, including a daily manager log book, payroll processing, and other similar tools.

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Leaving for home early today? You could be if you schedule employees with TimeForge.

With TimeForge’s AutoScheduler, you no longer waste hours checking that every shift has the right employee scheduled. The AutoScheduler understands the many different rules such as minimum and maximum hours for employees, skill levels of employees, whether or not employees can work doubles, labor costs, and when employees are available to work (availability and requests). With this information and without any effort on your part, TimeForge automatically schedules the right employees in the right shifts.

TimeForge’s daily templates make labor scheduling simple! Each daily template can have shifts which are pre-assigned to employees (salaried employees) or they can be assigned to employees when you create the actual schedule (part-time laborers). Many TimeForge users have templates for each day of the week, and additional templates for special occasions. To create Templates, click on the Schedules tab, and then click on Edit Templates.

The TimeForge Availability and Request system helps quickly build accurate schedules that match employees availability and requests. TimeForge assumes that all employees are available by default, so employees only need to enter when they cannot work. Requests can be simple, such as “I need next Wednesday off”, or complex, such as “I cannot work every 3rd Thursday or Friday starting next week.” Requests entered by employees must be approved by a manager or supervisor before the request shows up on the schedule.

Remember, TimeForge requires no contracts and no long-term commitments. There are no additional service contracts, no per-call or per-hour support fees, and you can cancel TimeForge at any time, for any reason. Upgrades are included in the monthly price, and we take care of the data backups. Best of all, setup is free!

Are you ready to go home early? It should take less than 5 minutes to make the employee labor schedule for your business! Did you know that TimeForge can streamline and minimize labor expenses through effective employee labor management at your business, bar, club, or restaurant?

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