You might think of Labour as being an Operating Cost. But, in reality, if your employees are permanent, they are an Overhead or Fixed Cost. This is because it takes a while to make any changes to permanent staff. Alternatively, short-term workers can be taken off the payroll much faster. Here are options to reduce permanent staff costs.

If you do have casual, contracted or hourly workers that you can put on or off the payroll, that will impact your Operating Costs. This is covered in the earlier Lesson – C4.3.2 Surplus Labour Resources. Here, you will give some thought to reducing permanent wages.

Permanent staff are often covered by fair work legislation so it is not easy to make arbitrary changes.

You might be able to achieve some of the following, in the short term, to impact on costs as soon as possible:

We make the point that any actions involving your permanent staff to reduce staff costs are likely to be stressful and unpleasant for all concerned. Therefore, they should not be done lightly.

At this point, you are primarily concerned with rapid actions that can save money in the short term. Later, you can come back to optimise the staffing arrangements.

For more help understanding any issues relating to this Section of the Turnaround90 Campaign, use the 12Faces Diagnostic System to drill down to root causes of problems and find our suggested Treatments.

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