Efficiency is often regarded as an overall positive term within business. Of course, if there is money or time to be saved, it logically follows that a business will shift its operation in that direction. At a time when sectors are now seeking to both weather and recover from the effects of an international health crisis, this seeking of efficiency and lowered expenditure is more apparent than ever.
There are, however, areas in which costs should only be rethought with great caution. While on paper, for example, reducing staffing or agency costs, might alleviate time and money to be spent elsewhere, there are consequences that are seldom predicted. This has become particularly apparent among contemporary business operations as those who have redirected spend to more tangible areas of operation are facing the consequences.
Hearing From Experts
Drawing from their industry partners, UK payroll services experts, People Group Services, have continued their interviews with business leaders into a post-pandemic environment, allowing them to reflect on the lessons learned over the past year. In a recent interview with Matthew Betteridge, Managing Director of OnCall24, the topic of business spend, specifically regarding agencies and staffing, was broached.
Betteridge tells “It is very dangerous ground to focus on spend as a KPI because there are lots of ways to manipulate spend. It doesn’t actually drive the bottom line up.” Adding, “If you start messing around with the worker’s pay, you’re not going to get the quality of workforce.”
His experience supporting the NHS has shown him that, while budgets may immediately improve by shifting spend around, you then lose the abstract benefits of having a loyal and willing workforce who are willing to take on “ad-hoc, emergency shifts.” The ability to better solve staffing solutions down the line, especially with a dedicated a robust team prevents potentially greater costs from occurring and, as the health crisis demonstrated, this strength of workforce is sometimes essential.
Building From Within
To some businesses, the idea of compromising employee pay seems an understandably bad idea and, yet, between 2018-2019, over a third of all full-time employees within the UK saw their salary freeze or decrease. There are a number of potential reasons why an employee’s pay may be affected. However, it nonetheless prompts the discussion as to why businesses appear to readily consider employee salaries to be an easily adjustable expenditure when, demonstrably, it is shown to have great costs beyond its immediate relief of overheads.
Alternatively, by increasing the amount of expenditure within staff costs, either through pay rises, staff training, or improved benefits, businesses have shown that productivity and output can overall increase, even during periods of uncertainty. These benefits, however, are more difficult to quantify than financial income, preventing many from taking the risk on what may appear to be an investment without return.
A New Normal
As businesses begin to trudge through a new financial landscape, one caught between a new normal and an eagerness to return to pre-COVID culture, those who take time to consider their expenditures, valuing essential staff and components of their operation with the willingness to support them through uncertainty, are likely to find themselves making the transition more easily.