How to Reduce Labor Cost

Labor constitutes a significant portion of the cost structure for most companies, and a small reduction in labor expenses can mean a significant boost to the company's bottom line. There are a number of ways to reduce labor cost, including the adoption of new technology, workforce and management training, and outsourcing.


Replace labor-intensive jobs with technology. Some jobs, particularly in manufacturing and distribution, can be performed by machines or computer technology.




Automate certain operations, which will make it easier for your workers to do their jobs. For example, installing conveyer belts in a warehouse may make it easier for workers to move goods from one place to another.




Develop process-mapping systems that can train your workers in how to do their jobs more efficiently. Process-mapping processes will differ by company, and you may want to hire an experienced consultant to help you design the system.




Offer early retirement to older, more highly paid workers. This may allow you to avoid layoffs that can damage remaining workers' morale.




Consider reducing or eliminating benefits, bonuses or other perks.




Outsource certain jobs to low-cost areas, such as Vietnam, India or Sri Lanka. Many foreign countries have highly productive, highly educated English-speaking workforces, and labor rates are generally much lower than in the United States.




Source: How to Reduce Labor Cost, By an eHow Contributor

Technology is squeezing the middle


The rich are getting richer but so are the poor

it is the workers in the middle who are feeling the pinch. Professor Alan Manning from the London School of Economics says technology is the main reason why middle-ranking jobs are on the decline. However, he also thinks that banking regulations put in place during the Great Depression in the 1930s helped level the playing field, only to be reversed by financial deregulation in the 1980s.  FT, Jul 15 2011, (4m 4sec),