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Construction workerI am surprised by how different managers view the commodity called “labor.” In most organizations, the perspective is that labor is an expense.

It is handled on the financial statements as an expense. In most cases labor is the highest monthly expense for an operation. It is the payment made in order to secure the resources needed to create the products or services sold by the organization.

As the largest expense for many operations, labor is watched and managed very closely. The profitability of the operation is directly impacted by how many workers there are, so all kinds of techniques are used to keep this variable under tight control.

You want to have exactly the right number of people on the roster, so perhaps you utilize temporary workers during peak times to mitigate overtime. You need to be careful because you still have to train the temporary workers so there…

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