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How do I save on labor costs? HR & Time Tracking Tips

The correlation between labor costs and profit margins

In today’s competitive market, increasing sales revenue might seems to be the only viable way that can increase profit margin. But as we all know, at times, one’s business revenue might be much affected by various external factors. Therefore most business owners strive to find another way to control their profit margins. This is why most business owners then turn internally to control their labor costs, from time tracking to payroll.



For most business owners, managing labor costs is probably one of the most important and difficult aspect in running any business.

According to business insider’s report ” Labor costs accounts for more than 60% of corporate expenses. Combine that with an inefficient time attendance management, time tracking errors, overpayment, bad payroll calculations, employee trainings, IT investments in HR, and a high turnover rate. All of this can lead to an explosion of high labor costs. When uncontrolled, labor costs can be a huge burden to the company. But for every problems that might potentially occur, there are always solutions to handle them. Here, we have rounded up 3 main tips on how you can save labor costs, thereby potentially saving thousands of dollars yearly!


1. Time Tracking

Most companies tracked their employees right from when they clocked in to the office, and when they clocked out of the office. Time Tracking is probably one of the main key factors that will decide on how much wage will be paid for the day, week and month. Though the concept of time tracking itself seems simple and overlooked . A lot of companies that tend to be flexible with their time and attendance system are often a victim of time theft. What is Time Theft? Time theft is a hidden labor costs where employees bill their employer for the time that they didn’t work. Time theft ranges from different types such as late clock ins, early clock outs, long breaks and buddy punching. (A practice where someone clocks in for someone else at work)


According to the American Society of Employers, 20% of every dollar earned by a US Company is lost to time theft . This is why using the right time & attendance app that will help accurately track time is important for you. Through time tracking, you will know on whether or not the employees have indeed worked rightly at the arranged work schedule. The right time & attendance app will not just help you track time accurately, but it will also help you prevent buddy-punching, a common loophole that could costs U.S employers more than $373 million every year. A good time tracking app are usually equipped with security prevention to time theft and buddy punching. Albam for example, directly notifies admins when a user tries to clock in from someone else’s device.


2. Optimizing Employees & Schedules

Some employers faces overstaffing problems, while some understaffing problems. Both equally damaging to productivity and profits, both of these problems have been faced by all corporates at some points. With this optimizing your employees’ efficiency is the main key in reducing labor costs. To begin with you need to do a through out analysis on the various types of positions that your employees’ held, their tasks and how much time does it takes for them to accomplish their job related tasks.









Once these are layed-out, you can then create a specific schedule for each team. Some departments like customer service and IT developers for example. They might need to work longer hours compared to their peers that are in sales team. As each situation might differ for each companies, their nature of business and work. Employers must create different types of working schedules with different shifts for each group of employees. This way, employers would be able to maximize productivity and reduce unnecessary labor costs that might previously be given due to the un-necessary long work hours in a schedule. A good time tracking app like Albam for example, would easily help and let you create a schedule by just taking a picture, swap employees in between and track the number of working hours that the employees have worked for.


3. Setting an overtime alert

When everyone is busy with their own work, without time tracking It is impossible to know which staffs are approaching their overtime period. This challenge even increases for bigger companies. Especially for ones that have different sets of departments and multiple branches. Problem is, at times of high season or projects, people may unconsciously do overtime. And when a lot of employees are doing overtime for a certain period. Overtime costs may increase and it can lead to a huge burden for the company. In some developed countries like Japan for example. The government has reformed its labor laws, and will now give a certain fine for employers that do not follow the regular working hour system.

To solve this problem, you can built a back-office system that time tracks employees when they are at work. And then set an automatic alert push notification system upon reaching overtime. But as we all know, this requires a huge amount of time, effort and also investment. To overcome this, why not consider Albam. Albam’s time and attendance system lets you set the overall working hours for the week, and the number of hours worked per day. You can even automatically set overtime reminder for employees who worked past beyond their working hours.



Saving Time means Saving Money

Looking at the big picture now, it’s easy to understand why a lot of companies are spending so much in labor costs when in fact they could have saved a lot. Though time attendance management adds up as a burden for HR. However, it is through the small things like these that companies are able to save a fortune. Time tracking is all about resource management and increasing productivity. Not only will you save money, but you will also be able to prevent an other wise lost productivity in human resources. Understanding details will help you to create the right decision, on where to cut and improve. The ultimate goal is not to only decrease expenditures, but to create efficiency for your labour management.

This is why we are here to help and empower you! With Albam’s patented accurate time tracking system. You would be notified, on when your staffs have started working, and when they have finished working. Get an overview of your employees statistics in real time. From clock ins & clock outs, leaves to even wage information.

About Albam

Albam is an all in one Human Resource solution system that allows you to manage and centralize every aspect of your staffing needs. From attendance to automated payroll. Backed by cutting-edge cloud computing system, clock in anywhere and anytime to access, personalize and download your data. Visit to experience the next generation of automated Human Resource system for your business.

Join more than 40,000 corporates that have trusted Albam in more than 20 countries worldwide now. Time attendance & Payroll management has never been this easier.

The Albam for Admin Android app and iOS app is now available for free. This isn’t a trial. Your free access to Albam Time & Attendance never expires.

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