Streamline Payroll Instead of Cutting It

Any business owner can tell you that the single largest expense of doing business is labor. Unfortunately, one of the first things management tends to look when they need to cut expenses is payroll. They start looking at what employees can be cut without harming daily production too much. Perhaps there’s a better way. Maybe streamlining payroll is a better option than cutting it.

Streamlining payroll is a matter of implementing new policies and technologies that cut the total cost of payroll processing. Dallas-based BenefitMall is a company that does just that. They offer a range of over-the-counter and customized payroll solutions ranging from the basics to full service. BenefitMall also offers benefits administration, workers’ comp insurance, 401(k) plans, and more.

A BenefitMall solution is a great place to start streamlining payroll. The amount of money saved may not equal cutting 25% of the workforce, but it still saves quite a bit of money.

How Much Is Enough?

So here’s the question: why do companies cut their workforces? Is it because they are losing money or just because they want to increase profits?

A fascinating article appearing on the Hospitality Net website in mid-August sheds further light on the question. According to this article, 90% of the 1.6% increase in total hotelier operating expenses between 2015 and 2016 was for labor. Furthermore, the hotel industry spends about 50% of its total annual operating costs on labor. The two statistics combined are causing angst among hotel operators.

According to writer Robert Mandelbaum, “it is understandable that U.S. hotel owners and operators were concerned about their ability to increase profits.”

The concern is not a hotel’s ability to continue making a profit; it is one of being able to increase those profits. And therein lies one of the greatest social conundrums of a capitalist economy. How much profit is enough? At what point do businesses sacrifice increased profits in order to take care of the employees who work so hard to generate them? These are not easy questions to answer, but answers are still needed.

Are There Other Ways?

Money is always a concern in tough economic times when businesses are struggling to make it. That is understandable. But with the economy rebounding and profits climbing, fewer companies can claim economic hardship with each passing quarter. Furthermore, those that want to remain profitable still need workers. Keeping staff intact and happy is a priority. All of this leads to the simple truth that there have to be other ways to cut expenses without cutting payroll.

Streamlining payroll to save on processing and administration is a good place to start. Modern cloud technology combined with state-of-the-art payroll software saves companies both time and money that can then be reinvested in the company. Right away that equals money saved.

Playing off a cloud-based payroll solution, there other ways technology can be used to increase worker productivity without demanding longer hours. Most small businesses could save additional time and money simply by revamping workplace policies. And, of course, there are always better ways to do things. Companies just have to be willing to embrace them.

It is unfortunate that labor is usually the first target of the cost-cutting ax. As the economy finally claws its way out of one of the longest recessions in U.S. history, maybe we would do better to look at streamlining payroll rather than cutting it. Perhaps we should look at ways to save money by boosting productivity. Maybe we should give serious consideration to the question of whether profits have to continually increase or not.