How to Increase Your Bottom Line by Controlling Labor Costs

At the end of the day, for every landscaping business, the bottom line is what matters most. Landscaping companies are constantly searching for methods to enhance efficiency and profitability. One of the most substantial expenses for many businesses, particularly in an industry like landscaping, is labor costs. 

Controlling these costs can directly influence the bottom line. In this comprehensive guide, we'll delve into the strategies and solutions that can help businesses manage labor expenses effectively.

Operational Inefficiencies That Balloon Up Labor Costs

Understanding the balance between inefficiency and efficiency in landscape operations is the first step toward improving your bottom line. Operational inefficiencies, such as over-scheduling crews, can lead to unnecessary overtime, which in turn can inflate your labor costs significantly.

Additional Read: Ins & Outs Of Optimizing Your Landscaping Operations Efficiency

Misalignment: Contracts vs. Estimates vs. Client Expectations

A common pitfall is the misalignment among contracts, estimates, and client expectations. Each element should seamlessly align to avoid any discrepancies that can lead to over-scheduling. An estimator's well-calculated figures may not always match the actual contract or client expectations, leading to a chain of inefficiencies.

"Number one is obviously having appropriate conversations with your client before you even go into the estimating portion of it," emphasizes Jess Volpe, CSM, Attentive.ai. 

Clear communication can ensure that the estimates you're working on align with the contract and meet client expectations.

 Lack of Standardization in Scheduling

The lack of a standardized method for scheduling can lead to chaos. From reliance on outdated Excel sheets to the precarious method of using whiteboards with magnets, each inconsistent approach opens the door to errors and over-scheduling. The absence of a unified system means that, as businesses grow, these inefficiencies only become more pronounced.

"...if you rewind, I think a lot of it starts there in getting the alignment between what you're putting on paper and a contract, what the client expectations are, and what that estimate says," Shawn Prince, VP, BizDev, Attentive.ai points out. 

The solution lies in standardizing the scheduling process across the board.

Preventing Overtime Through Automation

Overtime can be a necessary evil, but it should be a choice made with full awareness of its impact on labor costs. AI-automated end-to-end business management software Accelerate offers intuitive scheduling boards that can alert you to potential over-scheduling, giving you a chance to reassess before it leads to overtime.

"...it's going to prompt you that you're trying to over-assign the crew. So automatically right there, it's telling you you're spending more money," notes Jess.

Inflated Timesheets: Tackling Ghost Clock-Ins

Inflated timesheets can drain resources, with ghost clock-ins being a particular problem. A system that lacks real-time visibility into the crew's day-to-day whereabouts is vulnerable to such fraudulent practices.

"...the most effective way to prevent ghost clock-ins... is biometric authentication," explains Jess. 

With face recognition tech, you literally validate your clock-ins by taking a photo of someone's face versus scanning a badge or writing it in a timesheet. So, it enhances security and essentially eliminates fraudulent timekeeping.

Delayed Jobs: Communication Breakdowns Leading to High Labor Costs

Another significant contributor to inflated labor costs is the delay in job completion. A rigid job ticket management system, lacking real-time progress updates, and poor communication between operations and crew can all lead to costly delays.

_"Providing them with that sense of entitlement, that sense of ownership, they're going to go above and beyond just out of sheer respect for you and for themselves,"_ shares Jess. 

Encouraging communication and giving crew leaders a sense of ownership can mitigate these issues.

 Solutions and Key Takeaways To Control Labor Costs

To plug the leaks in labor costs, businesses should consider the following steps:

Align Estimates with Contracts

Ensure that what you are estimating is reflected accurately in the contracts and understood by the client. 

It's vital to perform regular reviews of contracts versus estimates to ensure they are in sync. This audit should involve the operations team and not just the sales or estimating departments to foster a holistic approach to project planning. Regular cross-functional meetings can highlight and resolve discrepancies between the estimated scope of work and the actual contract obligations.

Show the Crew What Winning Looks Like

Set clear expectations of job quality and recognize your team for their excellent work.

Empower Crew Leaders

Engage and empower crew leaders in the scheduling and execution process to instill a sense of ownership and accountability.

Equip your crews with mobile apps that allow them to report issues, track progress, and even suggest improvements to the workflow. This empowerment leads to a more engaged workforce, reducing turnover and the associated costs of training new employees.

‍

Additional Read: How to choose the best landscaping crew tracking app?

Adopting AI-Powered Production Planning and Time-tracking Capabilities

Automated job ticketing

Customizable job tickets can significantly reduce administrative overhead and improve field reporting accuracy. They should reflect the unique workflows of different teams or projects, facilitating easier and more accurate job costing.

With Accelerate, you get flexible job tickets. You can have your services grouped into one. You can have individual job tickets for every single job. And you can see their status, how they were completed, how they have been planned, and whether they have been started. And this will align with your operational needs and your SOPs. 

Intuitive scheduling 

With built-in overtime alerts to prevent over-scheduling.

Biometric authentication

To verify clock-ins and eliminate ghost clock-ins.

Geofencing

Ensuring employees clock in at the correct location with accurate property data.

Gantt report for controlling labor costs

Utilize Accelerate’s Gantt charts to provide a visual representation of a project's status. This transparency helps in identifying bottlenecks early on and enables swift corrective actions, keeping projects on track and within budget.

Real-time labor reporting

Offers instant visibility into estimated vs. actual labor hours. You can adopt a labor reporting system that provides real-time insights into each team's performance against the estimates. Use this data to hold regular review sessions with crews to discuss areas for improvement, celebrate successes, and plan for future projects.

Over to you: Controlling landscaping labor costs

In conclusion, increasing your bottom line by controlling labor costs is not just about cutting expenses—it's about optimizing every aspect of your operations for peak performance. It requires a blend of clear communication, technological integration, and a culture of empowerment and accountability. By implementing these solutions, you will not only control labor costs but also build a stronger, more resilient, and more competitive business.

You can embrace these strategies and an end-to-end business management solution like Accelerate to achieve a more efficient operation, control labor costs, and ultimately increase their bottom line. 

For more actionable advice on how to scale your business, stay tuned to our ScaleUp Webinar Series.