Labor Economics: World’s Shortest Lesson

Depositphotos_24204153_l-2015Option 1           Giving Away Free Labor                         Paid for by YOU for competition’s efficiency

Option 2           Paying for Senseless Labor                    Paid for by YOU for your inefficiency

You don’t want to have labor costs without getting a big bang for the buck for them. Much of the controllable labor cost and productivity results from Human Resources/Human Capital Management (HR) and you’ll be behind the 8 ball if you don’t manage it skillfully.

HR means Recruiting/Hiring, Training/Development, Compensation, Benefits, Employee Relations, HR/Personnel Records, Health/Safety & Strategic Planning

The question is… What are you doing about Labor Economics especially compared to others?1

The rest of the story (Optional):

Top five questions to ask yourself in relation to Option 1 and 2.

  1. Can I define our HR job and its importance to this organization?
  2. Do I know how much time and money we spend exactly per employee companywide to do HR well?
  3. Of the three available HR options A) Delegate HR to our staffer(s) as an additional responsibility) B) Use dedicated HR EE’s in a Professional department or C) Outsource HR, we chose option (A, B or C) ___ for the following reasons… Blah Blah.
  4. What usually happens after someone makes an error in your company?
  5. When was the first occasion you noticed it was harder to get the very best employees without going broke?

The others: CT Economics1

We have seen budgeted ‘HR” costs per employee range all over the place, from $270 per employee to $5,500 per employee for companies under 250 employees. What? That’s crazy. Someone is wrong.  BTW question 3, Option A, is the most expensive way to go nearly 90% of the time.

Investigate and seek professional help to make sure you get it right.


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