The 10 ways
Ten ways to reduce staffing costs
Most of these cost little or nothing to start. The first four usually make the biggest difference, because they deal with money that is already leaving the business every week. New to some of the terms? Our time and attendance glossary explains them.
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1. Pay for the hours people work, not the hours they remember
Paper timesheets and end-of-week guesswork leak money a few minutes at a time. A start time gets rounded up, a late finish is written in from memory, a break is forgotten. Each one is small, but it repeats across every person and every shift, every week.
Recording the real clock-in and clock-out times fixes this at the source. You still decide how times are rounded and how breaks come off. A system just applies those rules in the same way to everyone, every time.
In ClockRite Cloud
Staff clock in on a terminal, their phone or a browser, with geofencing to set where phone clocking is allowed. Shift rules handle rounding, breaks and overtime, and late starts and missed clockings are flagged before payroll. Time tracking →
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2. Agree overtime before it is worked
Overtime is often the largest labour cost a manager can change from one week to the next, and a lot of it is never actually decided by anyone. A shift drifts past its finish time, or the same person keeps picking up extra hours that someone on the standard rate could have covered.
Decide who can authorise overtime, and check part way through the week who is getting close to their hours, rather than finding out when payroll runs. If overtime is written into someone’s contract, changing it needs their agreement: Acas explains how to change a contract fairly.
In ClockRite Cloud
Overtime is set on each shift, daily or weekly, and you can give staff a short window to clock out before it starts. The Schedule Planner shows each person’s hours and labour cost while you build the rota. Scheduling →
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3. Deal with short-term absence early
Long-term sickness usually gets managed properly because everyone can see it. Odd days off are different. Each one brings cover, overtime or lost output, and they are rarely looked at as a pattern.
Have a short return-to-work conversation after every absence, record the reason as well as the dates, and look at the pattern over months rather than reacting to a single day. The Bradford Factor is a common way to pick out repeated short absences, but it has limits and needs to be used fairly.
In ClockRite Cloud
Every employee profile shows a Bradford score for the last 52 weeks, with paid and unpaid sickness recorded separately, and the daily Tardy Report lists late starts and missed clockings. Absence and leave →
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4. Plan holiday cover before it becomes a gap
Two people in a small team booking the same fortnight is one of the most common reasons for paying overtime or agency rates. The holiday is rarely the problem. Finding out about the overlap too late to plan around it is.
Keep every request on one calendar, check it before you approve anything, and encourage people to spread their leave through the year rather than saving it all for the last few months.
In ClockRite Cloud
Staff request holiday from their own phone and can check their balance at any time. Managers review every request in one queue, with upcoming leave in view, so overlaps show up before they are approved. Absence and leave →
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5. Train more than one person for each key task
When only one person can open up, run a particular machine or process the payroll, every day they are away costs more than it should. Cover has to come from overtime, from outside the business, or not at all.
Train two or three people on each critical job. It takes time to set up, but holiday and sickness can then be covered from inside the team, and it gives people who want to progress a way to do it.
In ClockRite Cloud
Each employee record holds their skills and qualifications with expiry dates, so you can check who is able to cover a shift. Skills that are about to expire are listed on the dashboard. Scheduling →
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6. Keep the people you already have
Replacing someone costs far more than the job advert. There is the time spent recruiting, training and supervising a new starter, the output lost while they settle in, and the overtime paid to the colleagues covering in the meantime.
A lot of what keeps people is basic: pay that is right every time, holiday requests answered quickly, and rotas that feel fair and arrive in good time. Getting someone’s hours wrong is one of the quickest ways to lose their goodwill.
In ClockRite Cloud
Staff see their own schedule and holiday balance on their phone, and their pay is worked out from the hours they actually clocked. Time tracking →
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7. Take the admin out of hours and holiday
Chasing missing timesheets, answering “how much holiday have I got left?” and typing hours into payroll all use up time that managers and payroll staff are paid for.
Self-service, where staff check their own balance and request leave themselves, removes most of the questions. Sending hours straight to payroll removes the retyping, and the mistakes that come with it.
In ClockRite Cloud
ClockRite Cloud exports hours for Sage Payroll Line 50 or as a CSV file, links with People HR and Sage HR, and has a REST API for other systems. Integrations →
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8. Match the hours you pay for to the work there is
A rota that suited the business two years ago may not suit it now. Compare the hours worked by day, shift and department with what was made, sold or delivered over the same period.
Once hours are recorded properly, the mismatches tend to stand out: quiet spells with a full team on, and busy ones held together with overtime. Run the same comparison every week so changes show up early.
In ClockRite Cloud
The Schedule Planner adds up each person’s shift hours and labour cost for the week as you plan, and you can hide the cost column from roles that should not see it. Scheduling →
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9. Rely less on agency staff and recruiters
Agency workers usually cost more per hour than your own staff, and recruiters charge for every hire. You will not remove either completely, but you can need them less often.
Build a small pool of trusted part-time or casual staff, ask your team for referrals, and plan busy periods earlier so the extra hours can be offered to your own people first. Keep agency cover for the peaks nobody could have seen coming.
In ClockRite Cloud
Upcoming leave and the rota sit in the same system, so gaps show up weeks ahead rather than on the morning of the shift. Scheduling →
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10. Offer benefits that are not a pay rise
Pay matters, but it is seldom the only reason people stay. Some choice over start times, a say in their shifts or an extra day’s holiday after a few years’ service cost little to give and are valued by the people who get them.
Employees can ask for flexible working from their first day in a job, so it helps to have a fair, consistent way of handling requests, and of saying yes where the work allows.
In ClockRite Cloud
Holiday can be kept in days or hours, so part-time and flexible patterns get the right entitlement without a spreadsheet. Absence and leave →
Where to start
Short on time? Start with two things
If you only do two things this month, look at overtime and short-term absence. They are usually the largest costs you can change quickly, and both become far easier to see once hours are recorded by a system instead of on paper.
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Pull last month’s overtime
List who worked it, on which shifts, and who agreed it. Unplanned overtime that nobody authorised is the first thing to bring under control.
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Map short absences over a year
Look at how many separate absences each person had, not just the total days. Repeated single days are where cover costs build up.
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Get hours recorded the same way for everyone
Both checks depend on accurate clockings. Once start and finish times are recorded rather than written down later, the rest of this list gets much easier.
Why ClockRite
See where your hours and labour costs go
More than 5,000 businesses trust ClockRite, and we have helped UK businesses with time and attendance since 1999. Our UK-based support team will help you set up shifts, overtime rules and holiday so the figures you act on are right from the start.
5,000+
Businesses trust ClockRite
55+ years
Combined experience of our current team
Since 1999
Helping UK businesses with time and attendance
UK based
Support team and UK hosted software
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Average rating on Google reviews
Daily
Tardy Report of late starts and missed clockings
FAQs
Staffing cost questions
Can’t see yours? Call our sales team on 01246 948451 or email [email protected].
What is the quickest way to reduce staffing costs?
Look at overtime and short-term absence first. Both are usually large, both can change within weeks, and neither needs anyone to lose their job. Start by listing last month’s overtime and who agreed it, then look at how often each person was off for a day or two over the past year.
How can I cut staff costs without making redundancies?
Pay only for hours actually worked, agree overtime before it happens, manage short-term absence, plan holiday cover early, cross-train staff, cut the admin around hours and holiday, and match rotas to how busy you really are. The 10 ways above go through each one.
Can I reduce employees’ hours to save money?
Only with their agreement, unless their contract already allows it, for example through a short-time working clause. Changing hours without agreement can lead to claims. Consult the people affected, put any agreed change in writing, and take advice for your own situation. This is general guidance, not legal advice.
How much does staff absence cost a business?
It depends on the cover. Add up the sick pay, any overtime or agency hours used to fill the gap, the output lost and the management time spent rearranging the rota. Working it out from your own records is more useful than a national average, and it shows which teams are affected most.
Does a time and attendance system pay for itself?
It depends on how you record hours today and how much overtime and absence you have. The return on investment calculator on our pricing page uses your own figures to estimate the payback, so you can judge it for your business rather than take our word for it.
Will staff resent having their hours tracked?
Most people mind less than managers expect, especially when they can see their own hours and holiday, and when clocking means they are paid for every minute they worked. Explain why you are doing it, apply the same rules to everyone and let staff check their own records.
What hours and holiday records must UK employers keep?
Enough to show you pay at least the minimum wage and follow working time rules, such as the 48-hour average week and limits on night work, along with holiday taken and pay. GOV.UK sets out what to keep and for how long. A time and attendance system holds these records for you.
Is agency staff ever the cheaper option?
Sometimes. For a short, unpredictable peak, or a specialist you only need for a few weeks, agency cover can cost less than hiring and training someone. It becomes expensive when it fills the same gap week after week, which usually means the rota or the headcount needs another look.
How does ClockRite help reduce staffing costs?
ClockRite Cloud records clockings from terminals, phones and browsers, applies your shift rules for rounding, breaks and overtime, flags late starts and missed clockings, shows labour cost as you plan the rota, and keeps holiday, absence and Bradford scores for every employee. See time tracking and scheduling for more.