Chat with us, powered by LiveChat

4 Methods of Reducing Labor Costs With Technology

How to reduce labor costs with new kinds of tech
Share on facebook
Share on twitter
Share on linkedin

Labor costs are one of many factors that contribute to the total cost of hiring an employee. The cost of labor has steadily increased in the past decade, and it is expected to continue to rise. This can include employee wages, taxes, benefits, and any other money spent to keep people employed. It’s not a fixed price but varies depending on the country, industry, and job type or role. The number can be broken down into two categories: direct costs and indirect costs. Direct costs are the wages that a business pays its employees for their work. Indirect costs are those that are not paid out in cash but instead spent on other expenses such as health insurance or retirement plans.

With the help of technology, many companies have found ways to reduce their labor costs. Technology is now at a point where it can take over many of the mundane tasks humans typically do. One way is through computer programs that can track schedules and hours worked by employees so that they are more efficient. Another way to reduce labor costs is to automate certain processes. For example, software can be used to replace people in a warehouse, saving the company money and eliminating the need for employees who move products around or who operate heavy machinery.


A company may also outsource work by finding employees in another country who can carry out the same job for less money, or by finding a different task they need done and outsourcing it, like transcribing audio or video files into text.


Labor costs can be tricky to get a handle on. It’s hard to know what the rate should be for an employee, or how much it costs to hire someone for a day. You might not even know exactly what some of your employees are doing! In this article, we will go into four different ways you can reduce labor costs by taking advantage of technology and the options that are available today.

Time Trackers

Time trackers for managers help you to get more done in less time. You’ll know exactly how much time each project requires, as well as the budget implications of your work. It will also give you a clear view of your team’s productivity, which can help you make decisions about hiring or firing staff members, especially when budgets get tight. This could also demonstrate how many people are actually needed to execute a job if they all optimize their working hours.

As an employer, you know how important it is to make sure your employees are putting in the hours they’re paid for. But if you want to ensure they’re really working when they say they are, you need a time tracking software that can monitor their computer activity and screen capture them at random intervals. It’s the only way to know what they do on their computers when no one is looking. These programs will make sure to let you know if you are paying for time spent working or otherwise. Understand what options are available and look into ways they can be overridden, so you know you are investing in the right program.


Automation is the future of work. As machines get smarter and more capable, they are increasingly able to do jobs that were once reserved for humans. This will cause a shift in the global workforce, with many workers eventually being replaced by machines and others re-trained or newly educated to take on new roles in society. The timing of this shift is hard to predict but it’s clear that we’re already seeing evidence of it all around us: self-driving cars, automated customer service chatbots, virtual assistants like Siri and Alexa–the list goes on.


If you’re not using a tool to automate your tasks, then you’re wasting valuable time and energy Tasks such as data tracking can be automated so that they are never forgotten or ignored – this could lead to more successful marketing campaigns and higher conversion rates! 


Automation is not a new idea. Factory assembly lines are primitive forms of this, but the possibilities have expanded exponentially since. Today, we have Artificial Intelligence (AI), which is ever-evolving in nature and should be at the forefront of every business owner’s mind.

Outsourcing Labor

Outsourcing work is a lot more common than you might think. It’s important to know how it works and what the advantages are so that you can leverage them for your business. This is one of the tools that globalization has brought to the job market today.

Outsourcing is when a company hires someone not in-house, usually through a freelance contract, in order to cut labor costs. This can be helpful if labor costs in other markets are lower than in the company’s home country. This also empowers businesses to seek talented professionals from a wider pool of candidates who may have a broader experience. Outsourcing also lets you save on employee benefit costs and often even taxes.

This is an especially beneficial option for roles that don’t require permanent positions or alternatively can serve as a temp-to-hire situation, giving employees the chance to show off their work before being offered a full-time role.

Going Remote

In line with outsourcing, we can understand that the Internet has made it possible for companies to find freelance talent anywhere in the world. You can hire a developer in India, an illustrator in Indonesia, or a copywriter in Ireland. This is great because you don’t have to spend money on office spaces and can instead focus your budget on hiring skilled professionals. It’s also better for the environment because offices use a lot of electricity and produce tons of waste.

Providing employees with the tools they need to do their jobs from anywhere at any time is also an important aspect of being able to go remote. This can include providing tech tools such as laptops built to handle specific tasks, a stable Wi-Fi connection, or a headset, just to name a few. This, of course, will depend on the job at hand. But maintaining a physical space can be a lot more costly, so crunch the numbers for yourself and see what is better for your company. 

Labor costs are a major expense for any business. Cutting labor costs is an easy way to improve profitability and get a competitive edge. When companies reduce their labor costs, they can often focus on other aspects of the business that need attention. In a world where everything is going digital, it’s becoming more and more important to utilize the power of technology.

It’s likely that most people will work for about half their lives and in today’s society, labor costs are always a consideration when it comes to any type of business. Hopefully, we have helped you gain some insight into how labor costs can be reduced by employing technology.

Share on twitter
Share on linkedin
Share on facebook