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Sustaining a business becomes challenging as labor costs rise, especially in the service industry, where people play a central role.
You must keep your eye on your bottom line but also prioritize your employees' well-being.
So how do you strike this balance? Through labor efficiency, or making the most of your workforce's talents, time, and resources to get things done smarter and faster.
But what is labor efficiency exactly?
How does it work?
How do you implement it successfully?
And how can it give your business the kick it needs to grow and thrive?
In today's episode, Herb Cogliano and I discuss labor efficiency - what it is, why you need it, and how it can make a positive impact on your business operations. He shares tips and strategies on how you can make it a part of your growing business.
Herb Cogliano leads his own advisory practice leveraging the Scaling Up Performance Platform, described in Verne Harnish's award-winning book, Mastering the Rockefeller Habits-Scaling Up.
As an International Business Coach, experienced CEO Scaling Up Practitioner, and Professor of the Scaling Up Masters Business Course, he has learned firsthand what it takes to overcome many business challenges.
Herb is pursuing his passion for working with leaders of growth companies to achieve more freedom by helping them create industry-leading strategies, a culture of accountability, flawless execution, and a healthy cash flow within their organizations.
We discuss:
03:30 What is labor efficiency and why is it important for any business?
05:01 Understanding labor efficiency as ROI on people and their impact on financial returns.
06:40 Revenue-producing labor and back-office support labor (or direct and indirect labor) in the labor efficiency equation explained.
11:30 Exploring the connection between labor efficiency and operating profit: Improving labor efficiency leads to higher profits.
15:37 Boosting labor efficiency strategies such as increasing team size, improving processes, and optimizing service delivery.
18:16 Defining A, B, and C players using talent assessment and evaluating employees by rehiring and core values.
23:47 Using tools and scaling up principles can create a positive work environment for employees.
27:09 The evolution of purpose and values in creating a successful business.
29:45 Actionable and manageable next steps to improve labor efficiency and operating profits.
Resources:
Herb Cogliano, International Business Growth Advisor & Certified Scaling Up Coach, Aspire Growth Advisors:
https://www.aspiregrowthadvisors.com/
LinkedIn:
https://www.linkedin.com/in/hcogliano
Email:
herb@aspiregrowthadvisors.com
Kathy Svetina, Fractional CFO:
https://www.newcastlefinance.us/
Blog post | Maximizing Labor E
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