With quarter four among us, many companies are paying close attention to their bottom lines. Often, the burden of the fourth-quarter push is directed at sales departments. However, it’s wise to take a look at business operations as a way to improve your bottom line all year-round. A “true” bottom line is the outcome of all aspects of your business.
There are a handful of operational adjustments you can make to boost your bottom line. Consider these four suggestions:
1. Outsource payroll
Though it sounds counterintuitive, spending money can save you money. Payroll can be a complex process, especially if you run a medium or large business. Without a dedicated team, it’s easy to miss important deadlines or miscalculate line items. If your organization doles out employee loans, it can add to the complexity of your payroll which can translate into mistakes or fees.
The IRS estimates that 40% of small to medium-size businesses in the United States end up paying a payroll penalty each year. Large companies also benefit from outsourcing payroll, especially if they operate in several different states as tax rules and regulations become more complex. Outsourcing payroll is a great way to keep organized and compliant and therefore improve your bottom line.
2. Improve direct deposit enrollment rate
Do you know how much a paper check costs? A business with 100 employees would save at least $7,000 by using direct deposit over paper checks. Sticking with the same math, a company with 1,000 employees would save $70,000 by using direct deposit. Between materials and personnel costs, cutting paper checks is expensive.
By incentivizing your employees to sign up for direct deposit, you can have a significant impact on your bottom line; depending on the size of your organization, your savings could add up to an entire salary for a new employee.
A great way to encourage your employees to sign up for direct deposit is to attach a perk to enrollment. Financial wellness programs like DailyPay connect to all payroll systems that use direct deposit. And for employees to gain access to the tool, they must also enroll in direct deposit.
3. Monitor employee behavior patterns
It’s common for management to look at employee satisfaction as a way to increase productivity. A Gallup poll recently found there are 22 million actively disengaged employees in the United States. This disengagement costs the economy as much as $350 billion dollars per year in lost productivity including absenteeism, illness and other low morale issues.
Studies have shown that management plays a key role in the increased production and employee engagement. Companies that show interest in their employees’ personal and financial well-being have higher productivity. Observing and monitoring how often employees are calling in sick, asking questions about their well-being and providing proactive solutions to common workplace issues can help ensure your employees are coming to work with a happy and productive mentality.
4. Stronger recruiting tactics
Attrition is a well-known bottom line buster for many companies, but it’s not always talked about in conjunction with recruiting costs. The Boston Consulting Group found that recruiting ranked number one among 22 different HR functions as having the highest impact on revenue and profit margins. Poor recruiting can lead to increased turnover and prolonged hiring.
One way to save money is by hiring the right employee the first time around. This requires patience and a bit of legwork, but it can pay off tenfold if you secure the right candidate. According to a report by Equifax Workforce Solutions, more than 40% of turnover happens within the first month and another 10% or more leave before their first year anniversary.
To avoid turnover from poor recruiting, ensure your job description is an accurate reflection of the role. When interviewing potential candidates, get a sense of their goals – will this position be a long time fit for their skill set and background? Take time to properly assess a candidate before pulling the trigger.
Each of these strategies enables management to increase the bottom line year-round. Have you found a creative way to improve your bottom line? Share your ideas in the comments below