Posted on 16 Jan 2017
The paint by numbers sets were so much fun as a kid. Just follow the pattern established by the numbers and you could paint a beautiful picture. Numbers are funny that way. They can paint pictures that are worth more than a 1000 words. If you are a small business owner with off-site hourly employees and you’re not minding your labor cost dollar numbers closely, the picture they paint may not be very pretty.
Let’s look at some numbers.
You started out with a target labor cost of 50% for the job. You spend an entire day gathering payroll data and putting numbers in a spreadsheet. Not only is this number gathering wasting your precious time, but because you don’t utilize an automated time tracking system your labor costs are 70% of revenues and you eke out a 10% profit. The struggle is real. But why are labor costs at 70%?
In studies done by the American Payroll Association and the Robert Half Agency, it’s shown that employees steal 10 minutes a day. (It’s extremely easy to take an extra 10 minutes a day when using handwritten time cards.) Employees can write down whatever clock in, clock out times they want. You’re lucky if it’s only 10 minutes a day. But we’ll say 10 minutes a day using an example of 15 employees – that comes to 150 minutes a day or 3262.50 minutes a month (54.375 hours) based on 5 day work weeks. Chronotek’s new Weekly Labor Cost Report can calculate your actual Labor Cost for you automatically. The report also takes into consideration the fully loaded pay rate. So if the employees’ pay rate is $8/hr, it might be that you are actually paying close to $9/hour considering taxes and workman’s comp. So you’re throwing $489 out the window every month on these handwritten time cards (that hurts a little bit).
Instead, embrace the wonder of technological accountability with an automated timekeeping system and take back your money. An investment in our system of $89 a month for 15 employees yields a return of $400 back in your pocket. That’s 4.5 times your investment and raises your net profit by 25%. If you pay your employees more than $8 an hour, then you’re making more money faster.
It’s time to get your money back. No more unearned pay and no more laborious spreadsheets. This is why we created the new Weekly Labor Cost Report that enables you to track true labor costs (pay rate + payroll taxes) against your labor budgets. A picture is painted using the exact numbers.
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