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Donning the economist’s hat

Supplier: Mitrefinch Australia By: Katrina Hall
21 December, 2015

It’s year end & many Australian organisations are well underway with the annual rituals of reporting on 2015, and planning for 2016. With that in mind, we’re donning our economist’s hats and shining a light on an integral part of the annual report of any company – labour costs.

It’s the end of the year, and many Australian organisations are already well underway with the annual rituals of reporting on the year that was, and planning for the year ahead.

With that in mind, we’re donning our economist’s hats and shining a light on an integral part of the annual report of any company – labour costs.

As a key component of profit and loss calculations and one of the most basic company expenses, labour costs say a great deal about a country’s growth and labour policies. Labour costs include the entire amount which is paid directly and indirectly to employees. This is basic wages, allowances, and any other entitlements.

There are some increases in labour costs that are largely beyond the employer’s control. These include government policies such as a minimum wage, or economic factors such as high demand for certain professions and not enough supply. However, there are also a range of reasons labour costs might increase within a company when they don’t necessarily need to increase.

These kinds of increases can be better controlled and managed via Mitrefinch time and attendance software – job and labour costing functionality. This system can assist decision makers to flag increasing labour costs due to decreasing productivity. This might occur due to increases in ‘idle time’, or non-productive time spent by the employees during working hours. Idle time might be because your employees are taking excessively long lunch breaks, or coming in late and leaving early.

It could also be that a particular job is becoming less profitable and productive over time.

For further information on Mitrefinch job and labour costing functionality, please get in touch with us today.