Doing more, with less: Strategies to mitigate for the effects of Brexit on labour costs
Last week we explored one of the likely effects of Brexit; restricting the supply and thereby increasing the costs of labour and recruitment.
This article outlines 4 tools at your disposal that may help you mitigate against these effects.
Automating processes (both manual and administrative) is naturally looking increasingly tempting; the cost of automation is coming down and the quality and ease of application of these solutions is improving.
Libra are well positioned to support in the generation of automation strategies but when we do, we typically urge our clients to place an equal, simultaneous focus on the development of their people. Huge portions of human talent and energy are wasted hence it is always worth getting the most out of your people before attempting to replace them with robots or algorithms. After all, people remain a business’s only appreciating asset.
Below are 4 key areas of work that we regularly support with in this regard:
1/ Staff Development Solutions
Development of your personnel can pay massive dividends, not only in terms of potential cash savings through increased productivity and skills flexibility but also in fields such as staff retention and engagement, meaning your business is better able to adapt to sudden changes in the market. Likewise, demonstrating a commitment to your team’s future development demonstrates confidence. At a time when life is so uncertain, this can make all the difference.
Libra have been delivering high-quality, bespoke staff development programmes for many years, however – now as an approved Apprenticeship Main Provider, we can offer our expertise in the form of Levy funded continuous-improvement or management development apprenticeships. Grade-A training at zero upfront cost.
2/ Management Control and Reporting Systems (MCRS)
All too frequently we meet client teams who have all the raw skills necessary for an operation to thrive, but by contrast the same problems repeat and performance remains mediocre.
We have delivered MCRS’s* across virtually all sectors; developing them in collaboration with all key stakeholders and coaching all users to become experts in the system.
A good MCRS has multiple benefits but notably it ensures that the aspects that are lowering performance are highlighted, discussed and resolved in a structured way. When used effectively a good system should ensure that everyone is aligned on what needs to happen to improve performance and feels able and empowered to enact these changes.
* An MCRS is the system that allows information flow and facilitates management of an operation. In practice it is a series of meetings, tools, procedures and reports as well as the behaviours necessary to use them effectively.
3/ Labour Planning and Control
Many of our clients employ many hundreds of operators across multiple shifts, factories and roles. In order to accommodate for fluctuations in demand (and therefore manning requirement) our clients quite rightly use a mixture of FTEs and agency staff.
Problems arise in quantifying how many agency hours should be called in for any particular shift. In a busy operation with hundreds of employees it is very easy to be paying for agency hours that you do not need.
Libra have had tremendous success developing the systems and the behaviours to reduce agency labour overspend. A recent engagement with a blue-chip private label food manufacturer reduced the site’s direct labour spend by over 8%, driven primarily by applying a Labour Planning Tool to expose and eliminate the practices that were driving wasted labour.
4/ Process Optimisation and Organisational Structure
We provide both a fresh pair of eyes in addition to 20 years’ experience spent developing processes across multiple sectors. We can make your human driven processes both more efficient and more effective.
Similarly, many organisational structures massively restrict productivity; some people are underutilised, some people struggle to get positive changes authorised and some people are so over-utilised that they do not have the headspace to be creative. Libra has considerable experience improving productivity by optimising organisational structures.
Please see our case studies for more information: https://www.libraeurope.com/case-studies
Naturally it is not just the effects of Brexit on the labour market that necessitate that British businesses improve their productivity; it is the primary challenge to overcome in order to remain competitive in a global market. Since the 2008 financial crisis, Productivity (as measured by GDP / hours worked) growth in the UK has all but stagnated (1). As discussed in our initial article, in the face of Brexit many businesses are focussing on contingency plans and stockpiling resources. Many of these same businesses are missing a (likely critical) opportunity to gain competitive advantage by investing and thus improving their productivity.
“Productivity isn’t everything, but in the long run it is almost everything”
Paul Krugman, Nobel prize winning economist
In the pursuit of gains however, you should not assume that you will be able to achieve your goals solely by reducing your manning requirement via automation; achieving more with your existing man hours remains an essential activity.
Written by Jake Madgwick, Project Manager
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