Regardless of what industry your business operates in, the pursuit of success and profitability involves simultaneously increasing productivity and reducing costs. If you’re able to do both of these things effectively and consistently, you’ll be successful.
The tough thing is figuring out how to do them. In many cases, making productivity a priority means spending more money. In other situations, reducing costs slows down processes and prevents optimal output. How can you find the correct balance?
4 Helpful Tips for Your Business
A multitude of factors play into a business’ ability to increase productivity and mitigate costs. And while every situation is unique, organizations across a variety of industries have found the following tips helpful.
- Leverage Analytics
Have you heard of “human capital analytics?” These tools allow companies to maximize the impact of their employees by identifying critical skill needs, determining optimal staffing and talent mixes, and developing cost-effective organization through proper workforce utilization. By understanding the value of these technologies, you can make the most out of your employees and avoid overspending.
- Use Cost-Effective Technologies
Thanks to the proliferation of innovation over the past decade, the answer to your woes may be as simple as aligning your business with the right technologies. By doing away with a manual task and efficiently automating it, you could be able to offset the technology’s cost multiple times over.
Master Drilling, a South African-based company, understands this better than anyone. The company is close to releasing a new line of game changing technologies for underground oil and gas workers in the United States. The purpose of these technologies? To revitalize the American oil and gas industry, which provides 9.8 million jobs and controls eight percent of the country’s economy, “by raising productivity and reducing costs.”
If an industry that controls eight percent of this country’s entire economy can improve by raising productivity and reducing costs, don’t you think a company of your size can increase efficiency by utilizing the right technologies, too?
- Reevaluate Payroll
Paying employees accurately and fairly is a challenge. There’s a fine line to walk, and you can mess up by stepping too far in either direction. Complex rules involving factors like overtime, premium time, government regulations, collective bargaining agreements, and company policies, can negatively impact profitably and efficiency if you aren’t careful. It’s a smart idea to regularly reevaluate payroll processes and automate procedures if you want to avoid costly issues.
- Shrink Administrative Overhead
Does your business have unusually high administrative overhead costs? If so, these inflated costs could be a byproduct of wasted time. One area specifically worth examining is your HR department. Many HR employees don’t make efficient use of their time because they’re constantly bogged down by employee questions. This results in a lack of productivity and increased HR expenses.
Well, according to one research study, providing software-enabled self-service capabilities for employees to find answers to their questions can save an average of $210 per employee annually. For a 100-employee company, that’s an annual expense reduction of $21,000.
Raise Productivity and Reduce Costs
There’s no one-size-fits-all solution when it comes to raising productivity and simultaneously reducing costs. If it were that easy, you wouldn’t see companies go out of business or drown in debt. If it were simple, every business would pull in seven-plus figures on an annual basis. However, it’s not impossible, either.
The tips mentioned in this article are just a starting point. Think about your business, isolate deficiencies, and focus on ways you can improve. Sometimes a solution is sitting right in front of your nose. Apply some critical thinking and you may be surprised to discover that the answer to all of your woes is feasible and cost-effective.