Staying competitive today requires companies to find new ways to drive revenues and profitability. One of your most significant expenses is your labor cost; however, it is also one that is most easily controlled. Are you tracking your dollars and labor minutes?
If not, you’re likely paying thousands extra in unnecessary wages.
Case #1 – Wasted labor Minutes
Did you know that just 15 employees receiving pay for merely 4 minutes of “wasted” time per day [untracked breaks, extended lunches, over-approximated punch times, etc.] will total 1,380 minutes [23 hours] of additional pay per month?
The Cost: if your average pay rate is $10 per hour, then you pay an extra $230 each month for labor worked.
Case #2-Human Error
The American Payroll Association estimates that the rate of human error in time card preparation is between 1% and 8%.
The Cost: Therefore, a conservative 2% human error rate on a $12,000 payroll would equal $240 in erroneous wages paid per pay period. Moreover, the cost to re-issue correct payroll amounts (if the error is detected and reported) further increases your cost of human error.
Case #3- Manual Time Card Preparation
The average payroll clerk spends 7 minutes per time card each pay period:
-Preparing and handling time cards
-Verifying time card totals
-Reconstructing lost or damaged time cards
-Computing time card totals
-Computing shift and department totals
The cost: Preparing 100 time cards will take an estimated 11.67 hours to complete. Therefore, at an average clerical wage of $15 per hour, time card preparation would cost $175.05 per pay period.
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