For businesses & non-profits operating on thin margins, it’s critically important to watch operational costs, including labor cost control. One of the best, most affordable way to implement a labor cost control initiative is to deploy affordable route optimization software.
Route Optimization Software Yields Powerful ROI & Labor Cost Control
In addition to reducing miles driven and fuel costs, route optimization software tools like RouteSavvy can save time, allowing businesses & non-profits to handle more calls in the course of an 8-hour workday instead of having to work overtime. This helps organizations minimize the need for staff to work after hours and reduces their overtime labor costs.
Let’s review how this works with an appliance delivery company:
- Acme Appliances has a fleet of 6 delivery truck drivers who earn $36,000 a year. Their hourly rate is $18/hour. Their overtime rate is $27/hour
- Each driver delivers and installs an average of 10 appliances per day.
- Each technician typically has to work 3 hours of overtime each week, which is paid at time and a half of their hourly rate. The cost of overtime labor for the 6 workers is $486 per week, or just under $2,000 a month.
- The cost of overtime labor is not passed on to the customer, because they’ve already paid for the appliance and a flat fee delivery charge of $50.
- By deploying route optimization software like RouteSavvy, Acme’s delivery drivers drive fewer miles in an 8-hour day.
- If RouteSavvy helps the 6 delivery drivers work just 2 hours less of over time each week, the savings to the company is $324 per week; roughly $1,300 per month; and a whopping $15,552 dollars per year.
- For small to mid-sized businesses, these savings can have a significant and positive effect on a company’s bottom line.
Labor cost control, particularly for over time labor, is an important part of managing a small to mid-sized fleet. Any fleet manager looking to mitigate overtime labor costs should be looking to deploy affordable route optimization software. RouteSavvy, for example, costs just $25 / month but can rack up huge savings that pay for the subscription in the first 2 weeks of usage.