Possible Solutions for High Non-Employee Performance Costs

3-5 Minutes to Read

Exploring Motivation as a Possible Solution for High Non-Employee Performance Costs

To be an effective manager, you must understand both the value and price of your employees. In the manufacturing industry, employee performance can be a huge source of financial losses or gains – making it critical to ensure that team members give their all every time they are on a production line. But what monetary value does an employee need to contribute to ensure that an organization is not losing money because of their non-performance? The most apparent answer is that they need to be producing as much as their benefits and income cost.

Unfortunately, pay is only a tiny piece of the puzzle, and several other non-employee performance costs can quickly rack up to make matters even worse. Some of these costs that may not be factored into the equation in many manufacturing facilities include utilities, transportation, equipment, telecommunications, real estate, and much more. From this perspective, no business that has employees that are only performing to meet their gross salary would be able to survive long-term because all profit margins would be lost.

How Can Motivation Reduce High Non-Employee Performance Costs?

It can be challenging for a business to identify high non-employee performance costs and understand how they are impacting their business’s finances. Since these things can take time to pinpoint and remedy, it is crucial to be vigilant in your motivational strategies company-wide until more financially sound systems are found to offset high non-employee performance costs. This will be an ongoing process for many businesses as technology and project requirements continue to change.

While motivation will not work directly on non-employee performance costs, they can be mitigated by motivating employees to work efficiently. For example, if the employees responsible for the transportation of parts are happy and performing well, they can often overcome the minor limitations with the equipment they are using, leading to higher costs. Likewise, a motivated employee will also be less likely to have errors in their work or a loss of productivity simply because they are so engaged in the process.

Forklift is putting cargo from warehouse to truck outdoors

Once employees become motivated, they will be able to work towards the same common goal to ensure high non-employee performance costs are dealt with as quickly as possible. For some managers, it can be challenging to have a difficult conversation with employees about their performance and how it affects the business; however, this is a critical step in reducing high non-employee performance costs and any direct employee expenses that may be accrued.

Any manufacturer that is struggling to reign in high non-employee performance costs will benefit from the performance-based staffing services provided by Certified Source. We work together with employers to ensure their staff remains motivated and engaged through a unique job advancement and variety approach that limits burnout. With the right people in place, any business can take the time to determine what high non-employee performance costs are affecting their business and address them quickly.

Exploring Risk Management Programs as a Possible Solution for High Non-Employee Performance Costs

When identifying risks in the manufacturing industry, it is often easy to focus on the human aspect of your workforce. This metric does not account for the risk when equipment becomes faulty or breaks down – which can be incredibly costly. According to Aberdeen, the average cost of machine downtime was around $260,000 hourly across all businesses in 2016. That expense can be avoided with the right risk management program. But what if there was an easy way to minimize downtime and increase stability with your manufacturing equipment?

At Certified Source, we strive to be more than just a performance-based staffing partner for the manufacturing industry. Our goal is to help businesses access the resources and strategies they need to succeed – even if they aren’t related to staffing! For this reason, we wanted to share some unique ways that risk management programs can be leveraged to decrease high non-employee performance costs. That way, you can focus on keeping your clients happy with as minimal downtime as possible throughout the manufacturing process.

How Can Risk Management Programs Decrease Non-Employee Performance Costs?

Technology solutions are essential for the manufacturing industry. Modern machines not only transform the way new parts are created but also streamline the process to make efficiency and affordability a priority. Unfortunately, removing the bulk of the human element that can lead to problems doesn’t necessarily remove all risks if the equipment isn’t properly maintained or monitored. And even a simple problem that goes unnoticed can lead to extensive downtime and high repair costs. But with the right risk management program, these factors can quickly be addressed and monitored.

These risks are often referred to as “third-party risks” since external factors influence them. For instance, the type of equipment you choose to invest in and how well you maintain them could present unique risks. Without these problems accounted for, non-employee performance costs can continue to rack up as malfunctions, downtime, and human error due to lack of training or inexperience evolve into struggles in meeting process goals. But what can be done to ensure that a risk management program focuses on these unique aspects of the manufacturing industry and mitigate the identified risks?

machinery tools and equipment
machinery tools and equipment

Manufacturers need to devise a solution outlined in their risk management program to minimize risks based on vendors, contractors, robots, partners, equipment providers, maintenance technicians, and other non-employee parties. Certified Source can help streamline this process by focusing on techniques like onboarding, training, auditing, and offboarding through our performance-based staffing services. In contrast, the management team at the facility focuses on non-employee-related risks that could be holding them back. This two-pronged approach to minimizing risk can help ensure that the business has the resources and plans to make a positive impact year-round.

Exploring Setting, Tracking, and Monitoring Quality and Productivity Goals as a Possible Solution for High Non-Employee Performance Costs

Most manufacturers have great systems in place to monitor quality and productivity goals for their employees. However, they don’t always take the time to ensure that these same checks and balances are available for non-employee performance costs like training, required equipment, certification programs, and more. Without these costs being factored into the overall equation, there is a good chance that the facility doesn’t know the actual costs they are accruing. Even worse, they could be directly impacting your bottom line.

At Certified Source, we know the true value of data. That’s why we encourage all of our manufacturing clients to take a well-rounded look at all high-performance costs that might be affecting their facilities. This includes high non-employee performance costs that may be sliding under the radar currently. Only with this holistic view will they be able to start making more informed decisions about what changes need to be made to improve productivity across the board and positively impact internal and external growth. In this segment, we will focus on the benefits of setting, tracking, and monitoring quality and productivity goals for a manufacturing facility.

How Can Setting, Tracking, and Monitoring Productivity Goals Decrease High Non-Employee Performance Costs?

Although the concept behind a SWOT analysis may seem dated, it is a good starting point to determine what quality and productivity goals make the most sense and which processes are likely to affect them. This can easily be broken into four squares; strengths, weaknesses, opportunities, and threats. For the most significant impact, consider completing these for all business areas, including non-employee performance costs like training or equipment updates that might increase productivity and performance. While we wish we could give more guidance, these factors may be different between each facility.

Most of the possible improvement metrics should be readily available for your review. For instance, if a recent training has been completed, then there is a good chance that you should be able to see a direct correlation in the improvements that are being made. This is particularly true for training options since you should know what the training is designed to improve. If you don’t see improvements, it may be time to cut those non-employee performance costs or look for a more suitable alternative. This constant pursuit of efficiency and performance should drive all decisions that are being made.

inspection and checking production process on factory station

Any manufacturer struggling to manage high non-employee costs will have to research their processes deeply to determine what factors contribute to them. One way Certified Source helps counteract these high non-employee costs is by ensuring that candidates have the qualifications necessary to make a positive impact and provide external training when needed to ensure qualifications are met. If you are interested in learning more about our performance-based staffing services or the unique ways that we can help you overcome high non-employee costs, please contact us today or find your nearest location to get started.