Turning Soft/Light Green Savings into Hard/Dark Green Dollars: The Unspoken Need for Labor Optimization
Trish Borzon
1489 Posts

Presented by: Katie (Castree) Benyo, Accumen

Area of Focus: Masters and Session Level: Intermediate

While improvement projects can have significant financial savings, there’s a tendency in service organizations to concentrate on projects that save time. Time savings are then converted to soft or “light green” dollars. For example, improving a process saves x hours, multiplied by an hourly wage, equals x financial savings. In reality, labor expense has not decreased. If there is a finite amount of work to be done, revenue has not increased. And executive leadership may be dissatisfied. What’s missing? The answer is Labor Optimization, and it does not entail reductions in force (RIF)! Labor Optimization is a long-term initiative to right-size your labor pool to support the business. As your organization pursues continuous improvement, successful projects reduce workload. Labor pool can then shrink over time while maintaining or increasing quality and service standards. If the organization sees an increase in business, right-sizing might look like maintaining the current labor pool while growing the business. If business is stagnant, then right-sizing is achieved through attrition. This session will cover what Labor Optimization is, what it is NOT, why it is important to capitalize on the time/labor savings of a process improvement, and the four key components to successful Labor Optimization.