As global economic headwinds are expected to persist in the short term and perhaps beyond, it’s important to maintain a razor-sharp focus on your business’s financial performance. Frequently evaluating your key performance indicators (KPIs) is a critical exercise to evaluate the results of your decisions to date. These metrics can provide clarity and answer questions you may have about near-term uncertainties. Should you increase the number of employees you have on staff? Will tools like rostering software help to reduce overspending and does using it make sense for our operation?
As a business owner, you need to ensure that you take the time to carefully analyze the specific requirements of your organization moving forward. By closely examining your processes, you will be able to identify areas where you can improve financial performance and then choose the right tools and strategies to help you take advantage of these opportunities. In the current business landscape, it’s vital that you give yourself every chance of competing with confidence in the marketplace, and with the right foundations you can improve your financial performance significantly, setting you up for success in the future.
Let’s review some common expense-related areas that merit your attention when making near-term decisions in stormy economic times.
Cost Of Being An Employer
Managing your team, your most important resource is a delicate balancing act of maintaining service levels, productivity, and quality. Keeping employees happy, rested, and productive is also something you need to strive for, otherwise customer relations and end product quality will suffer. The balancing act of reducing expenses while increasing productivity, morale, and net profit is where savvy managers find their competitive advantage in tight markets.
A key tool in the arsenal for planning, tracking, and measuring this metric is an efficient rostering application. Rostering software helps reduce overspending on labour expenses. It allows you to optimize human resource expense planning to a granular level, giving you an advantage over competitors not tracking their labor costs to this degree. Rostering applications let you track sick days, weekend shifts, overtime, busy workloads, and vacation requests, just to name a few. Employees appreciate having their schedules concisely defined so they can achieve their desired work-life balance.
Companies who prioritize employee health and well-being know that effective scheduling and workload management in turn leads to reduced labor costs, reduced fatigue, and improved morale. With the suitable systems in place, you can plan for holiday rush periods with more confidence, and avoid understaffing, absenteeism, and tardiness which in turn leads to better quality and service to your customers. You can also gain insight into performance metrics and start tracking which areas need improvement. Which groups are underperforming? Which products are seeing quality shortcomings? Which groups are not measuring up to their daily output benchmarks? In tight labor markets, it’s important to maximize the performance of your employees by tracking this data and implementing smart changes to help get the most out of your staff.
Strong financial performance is only achieved when you have the means of tracking the data points leading up to your quarterly and annual results. Your data is only as good as the software you use for tracking. By choosing and effectively configuring the best enterprise applications such as spreadsheets, content management systems, accounting packages, and employee rostering software, you can position yourself for success by having a solid foundation of data to derive future strategic planning goals and financial objectives. Organizations not planning their near-term objectives in this way face disadvantages versus competitors and are subject to potentially devastating surprises when unforeseen global challenges arise.
Meeting regulatory compliance with regard to employee health and safety is also a strategic objective for organizations focused on maximizing financial performance. Unexpected, expensive fines and penalties due to missed contractual obligations to union and non-union staff alike are something accountants and CEOs don’t like having to report to shareholders. An otherwise strong quarterly report can be marred by larger-than-forecasted overtime expenses.
Though contractors typically don’t receive the full suite of medical benefits their full-time counterparts do, having to pay out double or triple overtime can be an unwelcome surprise to upper management. Similarly, unionized full-timers are subject to a unique set of scheduling and safety metrics that if not adhered to can result in stiff fines to organizations found to be in non-compliance. So while selecting a robust rostering software to help reduce overspending can help your company minimise your labour expenses, it can also help you avoid paying out unnecessary fines related to poor planning and overscheduling, perhaps leading to increased regulatory oversight for your organization.
Improve The Overall Financial Performance Of Your Business Moving Forward
As a business owner, it’s crucial that you put safeguards in place that allow your company to perform at its very best. With the right systems, procedures, and protocols in place, you will be able to significantly improve the overall financial performance of your business moving forward. While the suggestions outlined above are certainly a great place to get started, there are many other areas where you can cut costs and improve financial performance in particular areas. Take the time to do an in-depth analysis of your business finances and you might be surprised at the opportunities you identify for you to improve the financial performance of your business.