Last updated October 2026

Workforce costs guide

10 simple ways to reduce staffing costs

In short: The staffing costs most UK businesses can bring down quickly are overtime, short-term absence, pay for hours nobody worked, and the cover bought in when holidays clash. None of them needs redundancies. They need accurate records of who worked when, and someone looking at them every week.

This guide sets out ten ways to bring staffing costs down without cutting jobs or pay. It is written by Computime, a Leeds company that has supplied clocking and time and attendance systems to UK businesses since 1989, so where our own software helps we say so, and where it does not we say that too.

A manager going through a staff hours spreadsheet with a colleague at his desk

10 ways to reduce staffing costs

  1. 1. Pay for the hours people actually work

    When hours come from a handwritten timesheet, or from memory at the end of the week, small roundings add up: ten minutes here, a quarter of an hour there, across every person and every shift. A time and attendance system records the actual start and finish, so payroll is based on hours worked rather than hours remembered.

    You still decide the rounding rules. The difference is that they are applied the same way to everyone, every time.

  2. 2. Approve overtime before it is worked

    Overtime is often the largest labour cost a business can control, and much of it is unplanned: a shift runs over, or one person picks up hours that could have been covered at the normal rate. Make overtime something that is agreed before it is worked, and check during the week who is close to their contracted hours, not after payroll has run.

    If overtime is guaranteed in someone’s contract, changing it needs their agreement. Acas explains how to change an employment contract properly.

  3. 3. Get on top of short-term absence

    Long-term sickness is usually handled with care. Frequent short absences are where cost builds quietly, because each one brings cover, overtime or lost output. Hold a short return-to-work conversation after every absence, and look at patterns rather than single days.

    The Bradford Factor is one way to spot frequent short absences; we explain how it works, and where it can mislead, in what is the Bradford Factor. Absence management software keeps the records without a spreadsheet.

  4. 4. Plan holiday cover early

    When two people in a small team book the same week, the gap is usually filled with overtime or agency staff, both at a premium. Seeing every request on one calendar before you approve it, with entitlement worked out for you, lets you spread leave across the year and spot clashes while there is still time to plan around them.

  5. 5. Cross-train your team

    If only one person can run a machine, open the site or process the payroll, their holiday or sickness costs more than it should. Training two or three people in each critical task means absences are covered from inside the team. It takes time up front, and it suits people who want to progress.

  6. 6. Keep the people you already have

    Replacing someone costs far more than the job advert: recruitment time, training, lost output while a new starter gets up to speed, and the strain on the colleagues who covered the gap. Fair rotas, holiday approved quickly and pay that is right first time sound basic, but people notice when their hours are wrong, and it wears away goodwill quickly.

  7. 7. Cut the admin around hours and holiday

    Managers and payroll staff lose hours every month answering “how much holiday have I got left?”, chasing timesheets and keying hours into payroll. Letting staff check their own hours and entitlement on their phone, through employee self-service, and exporting hours straight to payroll takes most of that away.

    Syncro Connect, our cloud software, exports hours for Sage, Xero, QuickBooks, BrightPay, IRIS, ADP and Pegasus payroll, so nobody has to type them in again.

  8. 8. Compare labour cost with the work done

    A rota that suited the business two years ago may not suit it now. Compare hours worked by day, shift and department against what was produced, sold or delivered. Quiet periods that are fully staffed, and busy ones covered by overtime, both show up quickly once hours are recorded properly.

    You do not need a data team for this. Most time and attendance systems, ours included, let you build the report yourself and run it every week.

  9. 9. Spend less on recruitment and agency cover

    Agency staff cost more per hour than your own, and recruiters charge for each hire. Referrals from your own staff, a small pool of trusted casual workers, and earlier notice of busy periods all reduce how often you need either. Agency cover still makes sense for peaks nobody could have predicted.

  10. 10. Offer perks that are not pay rises

    Pay matters, but it is rarely the only reason people stay. Flexible start times, an extra day’s holiday for long service and a say in their own shifts cost little and are valued. Employees can ask for flexible working from their first day in a job, so it is worth having a fair way of saying yes where you can.

What not to cut

Some savings cost more later. Do not let pay fall below the National Minimum Wage once unpaid time and deductions are counted. Do not stop keeping the hours and holiday records you are required to hold, and do not change contracts without agreement. A saving that ends in a tribunal claim is not a saving.

Where to start

If you only do two things this month, look at overtime and short-term absence. They are usually the largest costs you can change quickly, and both are far easier to see once hours are recorded by time and attendance software rather than on paper. To see what that costs, our clocking in system pricing page sets out every option.

Staffing costs FAQs

What is the quickest way to reduce staffing costs?
Usually overtime. Make it something that is approved before it is worked, and check each week who is close to their contracted hours. Paying only for recorded hours, rather than rounded or remembered ones, is the other quick win.
How can I cut staff costs without making redundancies?
Look at overtime, short-term absence, agency cover and admin time first. Those costs can often come down without anyone losing their job or their pay. Redundancy brings costs of its own and should come after these, not before.
Can I reduce employees’ hours to save money?
Only if their contract allows it or they agree. Cutting contracted hours without agreement can be a breach of contract. Read Acas guidance on changing employment contracts before you start.
How much does staff absence cost a business?
More than the sick pay. Each absence can bring overtime or agency cover, lost output and time spent rearranging the rota. Recording every absence and its reason is the only way to see your own figure, rather than relying on national averages.
Does a time and attendance system pay for itself?
For most teams, yes, but it depends on how hours are recorded now. Syncro Connect costs £2 per employee per month excl. VAT. If it stops one overpaid hour per person per month, it has covered its cost several times over, because an hour’s pay at even the minimum wage is far more than £2. If your hours are already accurate, the saving is mainly admin time.
Will staff resent having their hours tracked?
Some may at first, especially if it arrives without explanation. Say why: everyone is paid for the hours they work, including the extra ten minutes they used to give away. When staff can see their own hours and holiday, most find it fairer than a timesheet.
What hours and holiday records must UK employers keep?
You need records that show you are meeting the National Minimum Wage, the working time limits and holiday entitlement, as well as payroll records for HMRC. A time and attendance system keeps the hours and holiday records in one place, but the responsibility for them stays with you as the employer.
Is agency staff ever the cheaper option?
Yes, for short peaks you could not have planned for. Agency staff cost more per hour, but you only pay for the weeks you need them. They become expensive when they cover gaps you could have seen coming, such as clashing holidays or a predictable busy season.

See where your hours are going

Syncro Connect records clocking, overtime, holiday and absence on one staff record, from £2 per employee per month excl. VAT. We will show you using your own shift patterns.

Book a demoSee Syncro Connect

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