Respected Experts: How can I control SWB ( salary, wages, benefit) cost? Any practical solution for cost control? Thanks.
From India, Mumbai
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From India, Mumbai
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Dear Gaurav, You have given too little information. Please confirm the following:
Nature of Your Industry
What is the nature of your industry? Are you from the manufacturing or service sector? What percentage is employee cost against total cost or total revenue?
Impact of Employee Cost
Employee cost is an eyesore to employers. However, a reduction of this cost could impact customer satisfaction. If not customer satisfaction, then it could increase inventory carrying costs or other operational costs. Therefore, one needs to be cautious while "controlling" this cost. At best, it can be balanced with other costs.
Thanks,
Dinesh Divekar
From India, Bangalore
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8071Nature of Your Industry
What is the nature of your industry? Are you from the manufacturing or service sector? What percentage is employee cost against total cost or total revenue?
Impact of Employee Cost
Employee cost is an eyesore to employers. However, a reduction of this cost could impact customer satisfaction. If not customer satisfaction, then it could increase inventory carrying costs or other operational costs. Therefore, one needs to be cautious while "controlling" this cost. At best, it can be balanced with other costs.
Thanks,
Dinesh Divekar
From India, Bangalore
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Sir, thank you for reply. For service sector, we need to control SWB. How we can balance it with other cost?
From India, Mumbai
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From India, Mumbai
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Dear Gaurav,
Well, gentlemen, like top bosses, your queries are cryptic. In many companies, top bosses ask terse questions to their subordinates. The puzzled subordinates seek clarification to satisfy the bosses. Nevertheless, a few HR professionals also imitate their bosses and start testing the questioning skills of their subordinates. Are you testing the questioning skills of your fellow members?
Be it noted that on this forum all are equal. Nobody is a boss or a subordinate. This forum is not for filling in idle time slots. The seniors spend their valuable time, and those who raise the queries are expected to value their time.
This is a knowledge-sharing forum. A true knowledge seeker comes to this forum with an open mind. Open-mindedness means giving the information on the following counts:
a) What is the nature of your industry within the service industry?
b) What is your designation? Why have you raised this query? Is this your initiative or has it come from the top boss?
c) What efforts have you or your company taken to reduce employee cost?
d) Have you benchmarked against the competitor? What is the competitor's employee cost vis-a-vis yours?
e) Have you done workload analysis in your company? If yes, then on what parameters?
f) Have you done automation in your company? If yes, then in which section was it done, and could it reduce the manpower?
g) Have you conducted any studies on the quality of the manpower and customer satisfaction? If yes, then please share the outcome.
h) How do you measure the output given by your company per person? A few examples of measuring output per person are:
I. Hospital: - Number of patients served per day per employee
II. Courier company: - The number of deliveries made per day per employee
III. Passenger airlines: - The number of air miles per day per employee
Final comments: - I don't know, but if the crypticness is because of the lack of expressiveness, then you need to master the communication skills. The sooner you overcome this shortcoming, the better!
Thanks,
Dinesh Divekar
From India, Bangalore
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Well, gentlemen, like top bosses, your queries are cryptic. In many companies, top bosses ask terse questions to their subordinates. The puzzled subordinates seek clarification to satisfy the bosses. Nevertheless, a few HR professionals also imitate their bosses and start testing the questioning skills of their subordinates. Are you testing the questioning skills of your fellow members?
Be it noted that on this forum all are equal. Nobody is a boss or a subordinate. This forum is not for filling in idle time slots. The seniors spend their valuable time, and those who raise the queries are expected to value their time.
This is a knowledge-sharing forum. A true knowledge seeker comes to this forum with an open mind. Open-mindedness means giving the information on the following counts:
a) What is the nature of your industry within the service industry?
b) What is your designation? Why have you raised this query? Is this your initiative or has it come from the top boss?
c) What efforts have you or your company taken to reduce employee cost?
d) Have you benchmarked against the competitor? What is the competitor's employee cost vis-a-vis yours?
e) Have you done workload analysis in your company? If yes, then on what parameters?
f) Have you done automation in your company? If yes, then in which section was it done, and could it reduce the manpower?
g) Have you conducted any studies on the quality of the manpower and customer satisfaction? If yes, then please share the outcome.
h) How do you measure the output given by your company per person? A few examples of measuring output per person are:
I. Hospital: - Number of patients served per day per employee
II. Courier company: - The number of deliveries made per day per employee
III. Passenger airlines: - The number of air miles per day per employee
Final comments: - I don't know, but if the crypticness is because of the lack of expressiveness, then you need to master the communication skills. The sooner you overcome this shortcoming, the better!
Thanks,
Dinesh Divekar
From India, Bangalore
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The obvious answer is to reduce labor costs by way of reducing wages, salaries, and benefits. However, this is easier said than done. If attempted from an Employee Relations perspective, much thought must go into the modus operandi. Otherwise, the reduction in SWB could adversely affect organizational performance.
On the other hand, efforts should focus on increasing the size of the "cake" so that the percentage composition of SWB is reduced. Continuous efforts are necessary as SWB tends to increase year by year, and thus, turnover must increase at a greater rate.
As the learned Diwakar Sir has mentioned, providing more information will help in offering worthwhile suggestions.
From India, Mumbai
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On the other hand, efforts should focus on increasing the size of the "cake" so that the percentage composition of SWB is reduced. Continuous efforts are necessary as SWB tends to increase year by year, and thus, turnover must increase at a greater rate.
As the learned Diwakar Sir has mentioned, providing more information will help in offering worthwhile suggestions.
From India, Mumbai
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There is only way, remove the extra benefits & allow them to work from home if is it possible.
From India, Bhopal
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From India, Bhopal
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Hi Gaurav, How can I control SWB (salary, wages, benefits) costs? Any practical solutions for cost control? Thanks.
Controlling SWB (Salary, Wages, Benefits) Costs
Controlling SWB (Salary, Wages, Benefits) costs is essential for effective financial management within any organization. Here are some practical strategies to help you manage these costs:
Budgeting and Forecasting
Create a detailed budget that outlines expected SWB costs based on historical data and future projections. Regularly review and update the budget to reflect any changes in business conditions or goals.
Job Analysis and Classification
Conduct a thorough analysis of each job role to ensure that salaries and benefits are aligned with industry standards and the level of responsibility.
Performance-Based Pay
Implement performance-based pay structures to reward employees for achieving specific goals or exceeding performance benchmarks.
Variable Paid Bonuses
Use variable pay components, like bonuses or profit-sharing, to tie compensation to company performance. This can help align employee interests with organizational goals.
Benefits Optimization
Review and analyze the cost and effectiveness of current benefit programs. Consider adjustments based on employee preferences and cost-saving opportunities.
Flexible Work Arrangements
Allow employees to work remotely or use flexible work schedules. This can reduce costs associated with physical office space and facilities.
Outsourcing and Contract Labor
Consider outsourcing non-core functions or using contract labor for specialized projects. This can provide flexibility and potentially lower costs compared to full-time employees.
Training and Development
Invest in employee training and development programs to increase productivity and reduce turnover, which can lead to cost savings in the long run.
Technology and Automation
Implement technology solutions to streamline processes and reduce the need for manual labor. This can lead to increased efficiency and potentially lower staffing needs.
Regular Performance Reviews
Conduct regular performance evaluations to identify areas for improvement and provide opportunities for skill development.
Market Research and Benchmarking
Continuously monitor industry salary and benefit trends to ensure your compensation packages remain competitive.
Employee Engagement and Retention
Focus on creating a positive work environment to increase employee satisfaction and reduce turnover costs associated with recruitment and training.
Legal Compliance
Stay up-to-date with labor laws and regulations to avoid potential legal issues that could result in unforeseen costs.
Communication and Transparency
Keep employees informed about the company's financial situation and the reasons behind any changes in compensation or benefits.
Cost-of-Living Adjustments
Consider adjusting salaries based on the cost of living in different regions, especially if your organization operates in multiple locations.
Remember, it's crucial to approach cost control with a balanced perspective, ensuring that employees are fairly compensated for their contributions. Open communication and transparency about the reasons behind any changes are key to maintaining employee morale and trust.
From India, Bangalore
Acknowledge(1)Amend(0)
Controlling SWB (Salary, Wages, Benefits) Costs
Controlling SWB (Salary, Wages, Benefits) costs is essential for effective financial management within any organization. Here are some practical strategies to help you manage these costs:
Budgeting and Forecasting
Create a detailed budget that outlines expected SWB costs based on historical data and future projections. Regularly review and update the budget to reflect any changes in business conditions or goals.
Job Analysis and Classification
Conduct a thorough analysis of each job role to ensure that salaries and benefits are aligned with industry standards and the level of responsibility.
Performance-Based Pay
Implement performance-based pay structures to reward employees for achieving specific goals or exceeding performance benchmarks.
Variable Paid Bonuses
Use variable pay components, like bonuses or profit-sharing, to tie compensation to company performance. This can help align employee interests with organizational goals.
Benefits Optimization
Review and analyze the cost and effectiveness of current benefit programs. Consider adjustments based on employee preferences and cost-saving opportunities.
Flexible Work Arrangements
Allow employees to work remotely or use flexible work schedules. This can reduce costs associated with physical office space and facilities.
Outsourcing and Contract Labor
Consider outsourcing non-core functions or using contract labor for specialized projects. This can provide flexibility and potentially lower costs compared to full-time employees.
Training and Development
Invest in employee training and development programs to increase productivity and reduce turnover, which can lead to cost savings in the long run.
Technology and Automation
Implement technology solutions to streamline processes and reduce the need for manual labor. This can lead to increased efficiency and potentially lower staffing needs.
Regular Performance Reviews
Conduct regular performance evaluations to identify areas for improvement and provide opportunities for skill development.
Market Research and Benchmarking
Continuously monitor industry salary and benefit trends to ensure your compensation packages remain competitive.
Employee Engagement and Retention
Focus on creating a positive work environment to increase employee satisfaction and reduce turnover costs associated with recruitment and training.
Legal Compliance
Stay up-to-date with labor laws and regulations to avoid potential legal issues that could result in unforeseen costs.
Communication and Transparency
Keep employees informed about the company's financial situation and the reasons behind any changes in compensation or benefits.
Cost-of-Living Adjustments
Consider adjusting salaries based on the cost of living in different regions, especially if your organization operates in multiple locations.
Remember, it's crucial to approach cost control with a balanced perspective, ensuring that employees are fairly compensated for their contributions. Open communication and transparency about the reasons behind any changes are key to maintaining employee morale and trust.
From India, Bangalore
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