It seems like a ghost. It’s intangible, yet you still know it’s there. Its name is labor inefficiency, and it will kill your profits and potentially your business. The problem of labor inefficiency is often misdiagnosed as a case of bad employees. Sometimes this may be true, but it is also often due to poor use of technology, weak leadership skills and a lack of measuring more tangible business goals.
Here are 5 tips to help you reduce labor inefficiency in your business:
1. Embrace the 21st century.
One of the biggest mistakes a business can make is not investing in the right tools, this might be machinery or it might be software. Whatever it is, newer and nicer tools are being released every single year. And while these tools are a hefty upfront investment, they will pay off in the long-run. Employees that have tools that allow them to do their job faster, both get more done and are happier while they do it, because of reduced stress and fatigue. Make sure you understand that many tools and trends can give you a positive ROI, even if the expense stretches you thin at the beginning—just make sure to investigate tools beforehand so you get exactly what you need.
Labor inefficiency is a cancer to any business. One good way to avoid it is to set goals—or milestones, targets or whatever other synonym you want to use. But these are not just the targets that employers tend to set, no, these are targets that are followed up on. And that is the key, the follow-up. Too many times management will set a target, and maybe the employees met the target or maybe they didn’t. Management never actually took the time to go and look. Through following up, you can find out how you can help your employees achieve bigger targets.
Labor efficiency is key in every industry. However, employers can sometimes forget that while labor efficiency is illustrated through numbers, it is achieved though actual people. In other words, the employer or management creates the atmosphere that either encourages labor efficiency or does not. Many times, managers will take management to an extreme. They will either take a step back and become uninvolved with the employees and the common work environment, or they will micromanage. There needs to be a balance. Employers and managers should be involved, but they should also allow for freedom and creativity.
No, not rest and relaxation—rewards and recognition. The daily monotony of many jobs can wear a person down, especially if there is nothing to incentivize them to produce better work or to work faster. Rewards and recognition create this incentive. There are two main reasons people lose work ethic. The first is that they feel that even if they do more work, they are still given the same salary and benefits as other employees, so there’s really no need to put in the extra effort. The second is that they feel that because their work is not appreciated by the company, they are not needed. When you reward people for their work, even by just showing that you noticed, you will see their passion and productivity increase.
When you hire a new employee, you are putting a personal stake in. You are saying that you believe this individual can do the job and they can do it well. But this doesn’t always pan out. Sometimes candidates just interview well or maybe their personality is destructive to the work environment. Whatever it is, you should let them go. If you don’t, they can drag other employees down with them, including you. You might start to micromanage because they are not doing their job, or not doing it adequately. This is counter-productive to improving labor efficiency because it takes you away from your job and it wastes employees time meeting new expectations rather than focusing on their work.