How To Reduce Manpower Cost Effectively

Under normal circumstances, many people think of reducing the cost of human labor first of all to reduce wages, or simply cut down the necessary welfare costs, and then think of it.

What's more, in order to reduce the cost of human resources, many enterprises have made mistakes when they feel confused and confused.

Before and after the implementation of the new labor law, employees are required to "voluntarily".

The consequences of the above "emergency treatment" are enterprises unwilling to bear. In fact, they do not effectively reduce the labor costs of enterprises. On the contrary, they bring more human cost losses to enterprises.

Why?

Where is the misunderstanding?

The fundamental reason is that we have not thoroughly understood the real meaning of manpower cost, and the reduction of manpower cost is not only simply to pay as low as possible manpower price, it is not to cut down some necessary manpower cost, but to raise the rate of manpower cost and minimize the invalid cost.

Manpower cost rate and invalid cost are the concepts of most enterprises and institutions and HR ignored. This book tells readers how to effectively reduce labor costs from the perspective of raising the rate of labor costs and reducing the cost of ineffective.

Human cost rate and ineffective cost are closely related to the organizational structure, workflow, quality and performance, salary design, personnel mix, business advantage, staff quality model and turnover rate. Effective strategies to reduce labor costs must start from these aspects.

However, the current situation is not optimistic. In order to reduce labor costs, many enterprises and institutions often "catch sesame seeds and lose watermelon", resulting in a decline in the cost of human resources and an increase in ineffective costs.

The so-called invalid capacity cost is the labor cost that can not be added to the product or service.

Popularly speaking, organizations spend this money, it will not increase production, nor will it improve the service quality of enterprises.

At least, it will not directly add value to products or services, and the inevitable correlation between them will be more difficult to find.

In modern enterprises and institutions, invalid labor costs generally include the following 4 forms:

(1) personnel who do not need functions, work or procedures.

Whether it is now or in the past, there are still many cases in government departments or state-owned units. Some functions or personnel do not have any positive effect on the performance of the organization, or sometimes they are side effects.

Why do we leave this position or staff?

The reason is very simple: there is a certain department in a certain unit above, so we have to add this department, otherwise it will not pass.

(2) surplus personnel or time needed but with heavy workload.

There are many examples of this.

For example, many units in the past had the post of "Microcomputer", in fact, the typist.

Do I really have so many words to fight everyday?

Certainly not. It's just a few days in a month, busy at some time of the day, and the typist is idle for the rest of the time.

So now that the position has gradually disappeared, if any company has typist, then the management and staff's computer ability of the company is too poor.

A human resource management consultant went to the mainland to do some consulting, and found that some state-owned enterprises were still very valuable and important to typists.

The whole company is in a computer room with two computers inside. When entering, all personnel are sterilized, wearing masks, and wearing shoes. They say they are not taking the virus into the computer room.

The consultant was crying and laughing. He didn't expect the computer level to be so low that the understanding of the virus was so.

These typist's work is typing every day. When something is taken, they will fight, and nothing will be done if they take it.

Therefore, the functions of these posts are not great, or even unnecessary.

In fact, there are more or less such posts and personnel in every company.

In order to reduce manpower costs, the most effective way is to streamline personnel, which will be described in detail in this book.

(3) staff with low cost inputs and performance.

Here are the three major value orientations in the 33 pay theory.

What are the three major values?

First, personal value, also known as "intrinsic value", is the value of employees themselves, which is not easy to change with the change of service objects and jobs. It mainly includes education, professional, professional title, length of service, quality and so on.

Second, post value, also known as "use value", is to arrange employees with a certain amount of intrinsic value in a specific position, and the responsibilities and characteristics of posts are the basic platform to determine the contribution of employees.

Theoretically, post value will not change because of the different responsibilities of the post. It is a relatively static value coefficient.

Third, the value of contribution, also known as "market value", is the value created by employees for a particular job, and whether the value is worth buying.

Because in the sense of employment relations, employees are actually a commodity, but the enterprise does not buy the employees' body, nor is it the intrinsic value of their qualifications, professional or professional titles, but rather the performance created by their inherent value during their work.

Based on these three values,

A1. when the personal value is greater than the post value, that is, the intrinsic value is greater than the use value, the result is

Talent is wasted, or talent becomes mediocre.

Increase manpower cost, if not increase, it is inevitable that brain drain.

A2. when the personal value is less than the post value, that is, the intrinsic value is less than the use value.

It is impossible to fully perform its duties.

He barely performs his duties, but his quality or performance is not high.

Therefore, we should pay attention to matching the intrinsic value and the use value when recruiting.

B1. when the contribution value of the employee is greater than the remuneration of the enterprise,

Only if you manage to make profits, will you find ways to retain the employee.

B2. when the contribution value of the employee is less than the remuneration of the enterprise, even when the value is negative.

Business can not be profitable, and enterprises can only terminate their cooperation with the employee.

Therefore, when designing salary, we should link business efficiency and personal performance.

Many enterprises and institutions lack the correct grasp of these three values in personnel recruitment, performance management and salary design, resulting in a large number of people who invest a lot in cost and low performance.

The following is an interesting case:

A company called Hao Hao, the boss needs to recruit a secretary, the general requirement is: Bachelor's degree or above, English level six, fluent spoken language......

After recruiting and posting, many people came to apply for jobs. Many of them were famous undergraduates and postgraduates.

Soon, the company successfully recruited the secretary.

However, in the actual work, the secretary does not use English, which makes him wonder: since the work is not used in English, why does the company require English to pass six levels and be fluent in spoken English?

Such a job, the average college students can be competent, why did the company pay me a large price?

So the secretary went to ask the boss, the boss's answer is: who said that our company should not use English? Look at the name of our company -- big Hao, English is DA. HAO, isn't this English?

Although the cost of appointing you is relatively large, I think this position is necessary.

I said I wanted to recruit a secretary, and no one came to apply for it.

Write "English level six, oral fluency", more than 100 people apply for a job, I would rather pay a little more, otherwise I can not recruit.

Why is it so common that a general secretary can't be recruited, instead of requiring high recruitment?

This will be discussed later. Now the current situation of resources in China is a departure from the needs of the market. There is often a phenomenon that "recruiting workers can not recruit managers".

This is a good thing to prove that our country's industry needs to be greatly upgraded.

In fact, in some developed countries in Europe and the United States, it is difficult to recruit workers, only to recruit retired workers to do his job.

(4) severance expenses, recruitment costs and work-related costs.

Everyone knows that this is a great potential cost.

For example, if a company has worked for several years, the company will dismiss him or give him such a kind of compensation. This is no doubt the invalid cost. Is the recruitment cost invalid?

Of course, it is invalid. This part of the cost can not happen, or it seldom happens. The cost of industrial injury is also doubtless expensive, but it has no effect on products or value-added services.

Since these costs are invalid, it does not play a role in the appreciation of products or services. Can it not happen?

The answer is: No, it can not happen.

No enterprise can completely eliminate invalid cost and can only control it to the maximum.

For example, how can an enterprise have some surplus personnel, and there will be a little recruitment cost.

Some people may say that overtime pay is also ineffective. When working overtime, employees do more work and make more output for enterprises. How can it be invalid?

If employees use overtime time to surf the Internet without working, then overtime is of course not valid.

How can enterprises reduce invalid costs?

Of course, the above costs should be minimized.

How to control labor cost effectively is a major content of human resource management, because manpower cost is not only related to the overall cost of an organization.

The high cost will affect the organization's investment in other aspects, such as technology, low cost and insufficient labor cost. It is often difficult to attract talents to join, and eventually form a fetter for the development of the organization.

Obviously, this is a matter of efficiency and fairness.