How Employee Scheduling Software Can Minimize Labor Costs

Are rising labor costs keeping you up at night? You’re not alone. Managing a team is no small feat, and balancing labor expenses while maintaining productivity can feel like solving a never-ending riddle. 

Maybe you’ve noticed your team logging more overtime than planned. Or perhaps you’re wasting far too many hours on your weekly schedule-building process. These issues add up fast and can put a strain on your budget. 

But here’s the good news: employee scheduling software can help. With tools like When I Work, you can regain control over your labor costs while keeping your team running smoothly. Explore how this solution can transform your business. 

Key takeaways

Here are the things you need to know about minimizing labor costs with employee scheduling software:

• Labor costs include wages, overtime, benefits, and other employee-related expenses
• Poor scheduling practices can lead to issues like excessive overtime or understaffing
• Employee scheduling software helps you optimize schedules and control labor costs efficiently
• Reducing labor costs can improve profitability and employee morale
• When I Work provides easy-to-use tools that simplify scheduling 

Table of contents

• What are labor costs?
• How staff scheduling impacts labor costs
• The role of employee scheduling software in minimizing labor costs
• Benefits of reducing labor costs
• How When I Work helps you manage your labor costs

What are labor costs?

Labor costs are the total expenses you incur to compensate employees. They include wages, overtime, and other associated costs. Labor expenses tend to make up a huge chunk of a company’s budget. That’s why you need to carefully monitor and control these expenses. Otherwise, they can creep up and hurt your bottom line.

Where do labor costs come from?

Labor costs originate from all the expenses associated with employing staff. These include:

• Wages or salaries
• Overtime pay
• Payroll taxes
• Employee benefits (e.g., healthcare, retirement contributions)

Some common reasons your labor costs might grow under the radar include unnecessary overtime and employee turnover. Inefficient scheduling and untracked hours can also drive up your labor costs. 

Certain industries, such as retail or healthcare, are particularly vulnerable to hidden labor costs. For example, a retail manager might inadvertently overschedule employees during slow periods. This will lead to wasted resources and unnecessary payroll costs. 

On the other hand, failing to account for seasonal demand spikes can leave the business shorthanded. 

How staff scheduling impacts labor costs

Here are a few ways that staff scheduling influences your labor costs:

Overtime costs

Unplanned overtime is one of the fastest ways to wreck your labor budget. It occurs when you miscalculate staffing needs, leaving the team short-staffed and requiring employees to work longer hours to fill the gap. 

Don’t treat overtime like a bad thing. It’s not. You can use it as a valuable tool for filling in occasional staffing gaps. However, you need to track overtime hours and use this option sparingly. 

Consequences of overstaffing and understaffing

Overstaffing and understaffing are two sides of the same coin, and both hurt your budget in different ways. 

Overstaffing—having too many employees scheduled—leads to unnecessary labor costs. Picture a retail store with 10 employees scheduled on a quiet weekday afternoon when only five people are needed. 

Not having enough people on shift can be just as bad for your business. It can damage the customer experience and lead to employee burnout. For instance, understaffing in healthcare might lead to longer patient wait times. 

Spending too much time building the schedule

Scheduling can be a tedious process. You know this firsthand if you are still building the schedule using pen and paper or spreadsheets. You shouldn’t be spending hours tweaking a schedule every week. That time would be better spent growing your business and serving customers. 

Confusion among team members

Manual scheduling makes it tough to give your employees ample notice about upcoming shifts. A lack of notice about shifts is particularly common, and confusing, for shift workers. About one-third of shift workers receive less than a week’s notice about when they work. 

Over time, this confusion can lead to frustration. In turn, your team members may be more prone to calling out or missing shifts. You’ll have to rely on overtime to fill in the gaps, and this leads to bloated labor costs. 

The role of employee scheduling software in minimizing labor costs

Employee scheduling software is a game-changer for your business. It will transform how you manage your team, saving time and money. By implementing a dynamic employee scheduling solution like When I Work, you’ll enjoy capabilities such as:

Automated scheduling with labor forecasting

Employee scheduling software can help you automatically build your schedule based on demand forecasts. This means you’ll have the right number of employees for every shift. No more overstaffing during slow times or scrambling to cover busy periods. 

With labor forecasting, you can predict when your business will be the busiest and adjust staffing levels ahead of time. You’ll have a clear, easy-to-read schedule that adjusts shifts based on demand. 

Overtime management and alerts

No one likes surprise overtime costs. This feature tracks how many hours your employees work and alerts you if someone is close to going over their regular hours. With this heads-up, you can shift hours to other team members to keep overtime costs down.

Visualize an alert popping up on your dashboard letting you know that an employee is nearing overtime. You can also enable push notifications on the When I Work mobile app. 

Real-time shift tracking and timesheets

Accurate time tracking ensures you’re only paying employees for the time they actually work. This prevents time theft, where employees might clock in early or out late without approval. Additionally, you can quickly make adjustments if someone leaves early and forgets to clock out. 

The best part is that employee scheduling software can adapt to your preferred work model. You can use it to track hours on rotating schedules or accommodate unusual business hours. 

Employee availability management

Stop accidentally scheduling higher-paid employees when a more cost-effective team member is available. For example, you wouldn’t want to put a manager on the schedule to fill a line-level staff position. Instead, you can easily see which line-level employees are available and book one of them to fill the gap. 

Employee availability management is also beneficial for your employees. You can easily see who is on vacation or scheduled for a day off. This feature prevents you from accidentally putting someone on the schedule when they are unavailable. 

Integration with payroll systems 

Top employee scheduling software like When I Work integrates with popular payroll platforms. You can use this feature to sync schedule data and hours worked with your payroll system. This streamlines the payroll process and helps you avoid costly errors like overpaying employees.

Benefits of reducing labor costs

Cutting back on labor costs can be a huge win for your business. Here are some of the benefits of reducing your labor expenses: 

Increased profitability and productivity

Lower labor costs mean higher profitability. By optimizing schedules and reducing wasteful spending, you can allocate more resources to other areas of your business, like marketing or new equipment. 

Streamlined scheduling also ensures employees are working efficiently and being more productive each shift. 

If people are working short-handed, they will eventually get burned out and be less productive. On the other hand, overstaffing means there’s not enough work to go around. Employee scheduling software increases profits and productivity by ensuring you’ve got just enough people at work. 

Ability to scale your business

When you control labor costs, you free up resources to grow your operations. Suppose that you run a restaurant and want to open up a second location. If you are overspending on payroll and labor, you might not have the financial flexibility to invest in business growth. Cutting your labor costs to manageable levels can open the door for that expansion you’ve been dreaming of. 

Improved employee morale and work-life balance 

Efficient scheduling benefits employees, too. By distributing shifts fairly and reducing burnout, you can keep your team members happier and healthier. Employees with a healthy work-life balance are more likely to stay motivated and engaged. On the other hand, burnout might lead to quitting or more frequent callouts. 

How When I Work helps you manage your labor costs 

When I Work is loaded with tools to make scheduling easy. It has a built-in time clock for accurate time tracking. The secure messaging feature lets you easily share important information with your team members. You can send group messages or individual messages on a secure platform. 

When I Work also includes overtime tracking. It ensures you always know who is nearing overtime and who can take on extra hours. The mobile app lets you keep employees in the loop and track what’s going on with your business no matter where you are. 

Try When I Work free today to track your labor costs with ease 

Labor costs are a big part of running a business. However, they don’t have to become unmanageable. When I Work gives you the tools to regain control of your labor expenses, save money, and more effectively manage your workforce. 

Sign up for a free trial today! Once you try When I Work, you’ll never want to run your business without it.