How Compliance and Scheduling Can Help Your Business Maximize Workforce Labor

By Leah C. Machado, Director of Human Resource Services, Paychex

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Every employer wants to maximize worker productivity. To help get the greatest effort from staff -- and biggest push to profits -- businesses must reduce the cost of labor and boost employee engagement.

Labor costs make up the majority of expenses for most companies, and ensuring regulatory compliance with federal and state laws as well as addressing scheduling inefficiencies can both greatly enhance the bottom line. Consider a 2012 Paychex and CFO Research study, which found that more than half of senior finance executives planned to focus on amplifying the output of their workforce, and 26 percent aimed to reduce labor costs, including improvements to managing staff time and attendance and labor-related taxes.

Employers can also get more from their workforces with flexible scheduling, which may help employees derive greater satisfaction from their jobs and feel invested in the company.

Labor Costs Top Business Expenses

To minimize expenses, companies must maximize workforce labor and productivity. For most employers, the cost of labor -- the amount of employee wages and benefits, plus employers' payroll taxes -- represents a significant cost of doing business.

According to CTE Systems Inc., labor expenses can escalate from:

* Payroll mistakes -- According to the IRS, nearly 33 percent of employers make errors when manually calculating payroll, which costs billions of dollars in penalties each year.

* Inefficient work processes -- Businesses must identify and mitigate inefficient and costly processes to establish a culture of continuous process improvement.

* Employee misconduct -- Manual time-tracking processes create opportunities for dishonesty, such as punching in or out for absent co-workers.

* Timecard miscalculations -- Many timekeeping systems make it difficult to accurately account for time such as employees taking personal calls or leaving early. This can result in a payroll margin of error that cuts into company profit margins.

* Scheduling miscalculations -- Staff scheduling is a key component of workforce management, but errors can be costly. Managers need to see the total staffing picture to identify where problems occur.

Compliance and Scheduling: Pivot Points for Cost Containment

Companies must contain costs related to regulatory compliance with federal and state laws. In addition to payroll compliance, controls must be in place to comply with federal healthcare regulations.

For instance, hours worked plays a key role in determining whether or not a business is an Applicable Large Employer with 50 or more full-time employees, according to Employer Shared Responsibility provisions.

Employees who work 30 or more hours per week are considered full-time under the Affordable Care Act. For ALEs, monitoring those hours accurately has become increasingly important and should be considered a best practice for businesses of all sizes.

Another critical area is workforce planning and management. Optimal employee scheduling requires appropriate work agendas at individual and department levels. Examining past labor schedules and evaluating employees' skill sets can both serve as key indicators for increasing efficiencies.

Technology Improves Time And Attendance Management

Automation offers companies an effective way to streamline time-consuming tasks associated with employee attendance, payroll and budgeting. Time and attendance technology can contain labor costs by:

* Reducing supervisor oversight of staff time.

* Generating reports to monitor job activities, manage costs and increase worker productivity.

* Streamlining the application of complex payroll and wage-and-hour laws.

Automated time and attendance systems can promote workforce productivity by:

* Allowing companies to establish employee time rules and control access to scheduling systems.

* Establishing multiple pay rules to accommodate requirements for attendance, overtime and more.

* Relieving managers of administrative tasks to focus on more strategic work.

Flexible Scheduling Promotes Productivity

Employers can also drive productivity by boosting employee engagement. One tactic to achieve this is with flexible work schedules. Studies show that flexible scheduling results in workers with a greater work/life balance who "are happier, more productive and less likely to leave for a different job -- all good things for corporate profits."

Employers must evaluate the benefits and drawbacks of flexible scheduling. More employee freedom can create management challenges, although the rewards may outweigh the hurdles. To learn how Paychex can help small and mid-sized businesses with time and attendance solutions, call 855-973-2412 or visit


Sep 19, 2016
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