Labour

Sometimes this cost element is difficult to control and it can become a very complicated element.  Not one of two workers is the same; they have their own personalities, work ability and needs.  Although it is also a cost element, like material, it needs more involvement of management.   At first there are some expectations from the workers side, such as:

  • The payment of a fair remuneration
  • Work satisfaction
  • Security
  • Opportunity to develop to full potential

The employer expectations, on the other hand, are:

  • Loyalty from the worker
  • Productivity
  • Subjective contributions, such as initiative, leadership, credibility etc.

With labour you must remember that the business must buy labour and has to resell the labour at a profit.

Labour costs can also be divided into:

  1. Direct labour costs
  2. Indirect labour costs
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