Controlling Payroll Costs While Growing

ControllingPayrollCostsWhen an opportunity to grow comes your way, there is often a need to greatly increase your staff numbers. This brings a whole series of challenges including finding the right people quickly, training them up and keeping the good ones over the long term. Massive growth in staff numbers can easily hide gross inefficiencies. You can get into a money pit situation where the staff costs effectively de-rail the opportunities to grow. An excellent alternative is to keep the staff growth at a rate that you're comfortable and you can manage effectively but also invest in new software systems and automation to maximize the staff you have.

The beauty of this approach is that while the investment in your staff effectively disappears when individuals move on, the investment in software and systems stays for much longer. One of our Clients encountered such a scenario. They needed to grow quickly. The software we developed enabled them to grow quickly and opened up newer opportunities. The request was made for newer software systems, but our estimates for the requested functionality showed that it would be the software development investment would be significant and take more than 6 months to deliver.

Our Client decided to take the approach of ramping up on Staff quickly, using existing systems and off the shelf software. The end result was a business that operated but was grossly inefficient. The ramp up of new staff knowledge took longer than expected. After six months the majority of the additional staff members had been dismissed or had moved on. The bottom line is that Payroll costs are often the largest single cost for a business. A mechanism for managing these payroll costs as you are growing rapidly is to invest even more in new systems and software. The perception may be that it will cost more and take longer. The reality may well be something quite different. Good software systems stay with a business for many many years. They are worth the investment.