Blog

Reduce Labor Cost

Read

Reduce Labor Cost
0
(0)

Most business owners are constantly on the lookout for ways to reduce labor costs and make their company more profitable. The challenge, of course, is coming up with news ways to do so without cutting staff. As companies grow, so do their administrative overhead costs. How can businesses increase profit and expand while reducing labor costs? Here are five ways to do just that. 

SERVIAP can help with your global expansion needs. Contact us today to learn how you can expand your business with PEO in South America and Latin America. 

Create Predictable Schedules 

One of the biggest sources of extra labor costs is overtime. When certain employees work beyond a certain number of hours in a day and/or week, employers are required to pay overtime. This extra pay is on top of the normal rate and is often at least 1.5 times the standard hourly rate for every employee.  

Companies that don’t properly project and plan for the hours and shifts they’ll need covered will often be forced to pay workers overtime. To avoid this extra labor cost, business owners should take the time to properly project their need for workers and shifts. 

This can be especially challenging for seasonal businesses, such as the retail sector. However, proper planning and projecting will help reduce overtime even in that industry. Once you identify the shifts you’ll need, you can optimize schedules so you have enough employees on staff to avoid paying overtime. 

Minimize Turnover 

When companies have high employee turnover, they are forced to spend a lot of extra money recruiting, hiring, onboarding and training new workers. This is a labor cost that can be reduced significantly by ensuring employees want to stay at your company. 

Employees leave companies where they don’t feel appreciated, are underpaid, or aren’t empowered to do their jobs. Most employees today don’t want to just be given tasks to complete and paid in return. They want to be actively involved in helping their companies succeed. 

Consider providing opportunities for training and skill improvements, and ensure your team has what it needs to excel. You should also work to create a fun and inclusive work environment where employees are encouraged to give input and share feedback. When you allow employees to have a voice in how the company is run, they feel more a part of the team and are less likely to leave. 

Provide Incentives 

A great way to keep employees happy is to incentive their performance. This can be done in a number of ways. The most obvious way is to award financial bonuses to employees who achieve certain goals that their managers set for them. These goals should be measurable and result in a positive return for the company as well. 

You can also incentivize employees with other non-financial means. This could include employee recognition programs such as Employee of the Month awards or extra paid days off. Employees aren’t always incentivized by money, so you can get creative with ways to reward workers for a job well done. 

There of course will be a labor cost associated with these incentives. However, if you design the incentives correctly, you will get a positive return on investment. In addition, these costs should be significantly less than what it would cost to replace employees who leave. 

Streamline Your Processes 

One of the biggest labor costs comes from inefficient processes. From time to time, you should review all of your company’s processes to ensure they are optimized for efficiency and cost. 

At times, you can eliminate entire tasks by updating your processes to reflect where your business it today, rather than where it was when the process was initially created. 

Various technologies can also help you to streamline processes and cut costs. In the past, a lot of manual labor was required to complete tasks such as timesheets and payroll. Today, there are software programs that can help streamline these processes and reduce the amount of work required.  

Outsource Certain Processes 

Another option is to outsource some of your company’s processes to another company. Some of the most popular and common tasks to outsource are call centers, IT services, and HR departments. 

There are many different options for businesses to outsource today—from local outsourcing to nearshore and offshore outsourcing.  

One great option is to hire a Professional Employer Organization (PEO) based overseas to handle all of your administrative functions. In this scenario, you can realize significant labor cost savings by hiring skilled workers at a reduced labor cost and having the PEO handle all of the associated payroll processing, employee benefits, and other HR tasks. 

The great part about working with a PEO is that it will be a co-employment relationship. In other words, you won’t lose control of your workers. Instead, you will still be the official employer of your outsourced workforce—even if they are based in another country. Meanwhile, the PEO can help to eliminate administrative burdens by managing compliance, taxes, and more. 

Expand Your Business

SERVIAP is a leading Professional Employer Organization (PEO) ready to help your business expand operations throughout the Western Hemisphere. PEO is a model of co-employment, where we assume total responsibility for your talent, allowing you to focus on the strategic activities of your organization. Contact us today to learn more about how you can expand your business in South America and Latin America. 

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

As you found this post useful...

Follow us on social media!

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?

Articles

Stay informed on the latest topics in the world of global expansion.

Global Leadership Strategies for International Expansion

Webinar

0 (0) Scaling internationally isn’t just about entering new markets-it’s about transforming how you lead. The way you communicate, motivate, and build trust can determine...

Read Blog Post

What Employers Should Know: June 2025 Payroll Deadlines in LATAM

Global Labor Updates

5 (1) For companies managing payroll across Latin America, June marks an important month with multiple legal deadlines. From mid-year bonuses to profit-sharing obligations, it’s...

Read Blog Post

How do Tariffs Affect the Global Economy: Consequences For International Teams

Global EOR

5 Read

Tariffs, once used for protecting local industries, are now powerful levers that influence expansion.

Read Blog Post

What is Neurodiversity in The Workplace And How to Support it

Talent Acquisition

5 Read

Fostering a truly inclusive workplace means going beyond compliance and actively celebrating neurodiversity in the workplace.

Read Blog Post

PEO vs EOR Services: 2 Options to Choose

Global EOR, International PEO

5 Read

Understanding the key differences between PEO vs EOR services is crucial when choosing the right solution for your business.

Read Blog Post

New Minimum Wage in El Salvador: What it Means For Global Companies

News El Salvador

4 Read

The new minimum wage in El Salvador became effective on June 1st, 2025, and requires a varying increase across different sectors.

Read Blog Post

Serviap Global Celebrates 15 Years

Featured, News

5 (2) In 2025, Serviap Global celebrates 15 years of history, an achievement that mirrors the rapid transformation of the employer of record (EOR) industry...

Read Blog Post

How to Pay Contractors Internationally: a Quick Guide

Independent contractors, Talent Acquisition

0 (0) Hiring international contractors can help you grow your business, reduce costs, and access specialized skills, but navigating how to pay contractors across borders...

Read Blog Post

How Can a US Company Hire a Foreign Employee?: 3 Useful Options

Recruitment, Recruitment process outsourcing (RPO)

0 (0) Even with recent tariffs and economic uncertainties, many American businesses are looking beyond borders to tap into international talent. But how can a...

Read Blog Post

Working Hours in Mexico: Country Plans 8-Hours Reduction by 2030

News Mexico

0 (0) Recent years in Mexico have been marked by recurrent discussions in labor reform, including the increase of minimum wage and the fight against...

Read Blog Post

4 Global Expansion Tips With Aaron McDaniel

Global EOR, Remote working

Expanding globally in 2025? The goal is not just about targeting the biggest markets. Read and discover global expansion tips to grow with confidence.

Read Blog Post

Serviap Global Wins at the 2025 Excellence in Customer Service Awards

Awards

The Serviap Global team has been recognized in the Exceptional Customer Experience category.

Read Blog Post

Live Webinar: What You Must Know About Global Expansion in 2025, with Aaron McDaniel

Featured

Learn insightful tips for global expansion expansion in our live webinar, featuring Aaron McDaniel.

Read Blog Post

Serviap Global is a Finalist at the 2025 TIARA Talent Solutions Awards US

Awards

Serviap Global becomes a finalist in Client Service at the 2025 TIARA Talent Solutions Awards US.

Read Blog Post

How to Use AI in Hiring International Workers

Recruitment, Recruitment process outsourcing (RPO), Talent Acquisition

How to use AI in hiring? Discover the history, benefits, and challenges of AI assistance in global talent acquisition.

Read Blog Post

How U.S. Tariffs Benefit Canada and Mexico: A Strategic Advantage in Global Trade

News

5 (1) US tariffs on other countries strengthen the position of Mexico and Canada as key partners for companies looking to expand, hire talent, and...

Read Blog Post

Borderless Talks Ep. 6: Women in Remote Work And The Evolution of The EOR Industry

Featured, Global EOR, Remote working

Episode 6 of Borderless Talks invites Brend Limón to discuss the evolution of global collaboration from the perspective of women in remote work.

Read Blog Post

Serviap Global is a Finalist at the 2025 Latin America Inspiring Workplaces Awards

Awards, Featured

Serviap Global is nomitated as a finalist among 8 other global companies at the IW Awards 2025.

Read Blog Post

How to Manage International Teams: 5 Tips for Leaders

Global EOR, Remote working

Efficient international teams take hard work and ongoing efforts in communication and culture. Here are 5 considerations to improve remote teamwork.

Read Blog Post

2 Options for Hiring Remote Foreign Employees Without a Local Entity

Global EOR, Independent contractors

The complexities of hiring remote foreign employees can be simplified with these two options: EOR collaboration and hiring independent contractors.

Read Blog Post

Infographics: Can we Overcome The Global Talent Shortage in 2025?

Recruitment, Talent Acquisition

Discover some key tips to help you beat the global talent shortage and getting ahead.

Read Blog Post

Borderless Talks Ep. 5: Advantages of Chinese companies in Latin America

Featured

Listen to the fifth episode of Borderless Talks with Serviap Global's Sales Executive from China, Sally Chen.

Read Blog Post

6 Important Documents to Hire Employees Abroad

Recruitment, Talent Acquisition, Visas and Immigration

Get to know some of the important documents and steps to hire employees abroad for global companies.

Read Blog Post

Global Hiring Trends in 2025: Which Industries Are Leading International Expansion?

Global EOR, International PEO

In 2025, many sectors will be at the forefront of international expansion and global hiring trends, from technology, to manufacturing, and so on.

Read Blog Post

Infographic: Working Hours in Latin America by Country

Infographics, International PEO

The maximum working hours in Latin America vary from country to country. Getting an overview of their work practices is essential to enter this region's...

Read Blog Post

Hiring In Colombia: 10 Key Factors To Know Beforehand

News Colombia, Talent Acquisition

Discover important aspects of the Colombian market based on the World Bank's Business Ready 2024 ranking.

Read Blog Post

How Does EOR Work?: Your 6-Steps Easy Guide

Global EOR, International PEO

An Employer of Record helps you enter new markets in a matter of weeks or even days. But do you know how does EOR work?

Read Blog Post

New “Unidad de Medida y Actualización” in Mexico: What it Means for Employers in 2025

Global EOR, News Mexico, Payroll outsourcing

The "Unidad de Medida y Actualización" index was increased by 4.21% in 2025 and reflects in the payment increase of fines and other obligations.

Read Blog Post

Borderless Talks Ep. 4: Top Global Expansion Mistakes to Avoid in 2025

Featured, Global EOR, Podcast

Listen to the fourth episode of Borderless Talks with Global Expansion Expert, Klaus Wehage.

Read Blog Post

Infographics: International Maternity Leave Standards

Global EOR

Browse our maps to discover the main differences in guidelines for international maternity leave rights.

Read Blog Post