9 levers to control labor costs


December 14, 2023

llustration: Trifonenko / iStock / Getty Images Plus / Getty Images

llustration: Trifonenko / iStock / Getty Images Plus / Getty Images

These tips can help you reduce employee turnover and create a more positive and productive work environment:

1. Hire the right people. One of the most important ways you can control labor costs is to reduce employee turnover. Optimize your hiring process by ensuring it is efficient and effective. Make sure you hire people who are a good fit for not only the position, but your company culture. They should be passionate about their work.

2. Review your job descriptions. Are they accurate and up to date? Do they accurately reflect the skills and experience required for each position? A review will help ensure you are only hiring employees who are qualified for, and want the job, and avoid unnecessary turnover.

3. Track labor costs by category and by department. By tracking costs in this manner, you can identify areas where you can make departmental savings.

4. Use labor benchmarks. Compare your labor costs to other businesses in the pest control industry. This tactic will give you an idea of how your labor costs stack up. Set clear goals and expectations What are your overall goals for labor cost control? See pcobookkeepers.com/profitability for guidance.

5. Use technology to improve your routes. Your routing software can help you optimize windshield time. Route efficiency and pricing are the two most powerful drivers in keeping labor costs to a minimum as a percentage of revenue. Keep your route density up and your drive time down.

6. Provide training and development opportunities. Investing in your employees’ training and development can improve their productivity and efficiency. Not only does this make them more valuable to your company, but it will lead to lower labor costs in the long run.

7. Understand your overtime (OT) and use it sparingly. OT can be expensive, so it’s important to keep it to a minimum. If you do need to use OT, make sure it’s justified and contributes to growth or profitability.

8. Conduct exit interviews. Get feedback from employees who are leaving your company and use the intel to identify areas where you can improve your company culture and retention efforts. Employee retention is key to keeping labor costs down.

9. Create a culture of appreciation. Show employees their hard work is appreciated, and they are valued members of the team.

Read Dan Gordon’s full cover story from the December issue. 

About the Author

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Dan Gordon, CPA, owns PCO Bookkeepers & M&A Specialists, an accounting and exit planning firm that caters to pest management professionals throughout the United States. He can be reached at dan@pcobookkeepers.com.

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