When businesses are making a good profit, it usually translates into staff benefits like bonuses and raises. But, when they are performing badly, they have to deal with the negatives such as retrenching staff.
As South African businesses struggle to adapt to the tough economic conditions and transitioning through the fourth industrial revolution, many have resorted to conducting retrenchments in order to reduce operating costs.
Recently, Fin24 reported that Group Five Construction, a wholly owned Group Five subsidiary, is conducting retrenchment proceedings to cover a R2.39 billion cash deficit. In another article, the Sowetan Live, revealed that Standard Bank is in a process of cutting about 1 200 employees and closing 91 branches in an effort to support the growing demand of digital banking services, while ABSA is also holding talks with SASBO, a finance labour union, regarding restructuring, which could see 827 people without jobs.
In addition, just last year, an article on IOL stated that the SABC planned to cut 1200 freelancers and 981 permanent employees, while Impala Platinum also announced that it would lay off up to 13 000 employees to meet its restructuring plans in Rustenburg, the Business Report wrote.
It is evident from the above information that retrenchments are not unique to one industry, especially now that businesses are undergoing a technological revolution that is changing the nature of work. So, what does this mean for the logistics industry? With the slow economic growth, plus the ever-increasing fuel levy, fleet businesses are unlikely to have a smooth sailing financial year. While this may give the logistics industry a gloomy view, there are significant measures that can be taken by fleet businesses to avoid downsizing.
Five Measures to Avoid Retrenchments
1. Reduce Fuel Costs Using Telematics
The starting point to saving money and avoiding retrenchments in your business is to reduce the fuel costs of your fleet. Research conducted by Fleet Magazine shows that fuel accounts for up to 40% of the total cost of your fleet.
Often, the source of excessive fuel consumption is poor driving habits, such as excessive idling, speeding, and quick acceleration. But using telematics can help save money spent on fuel for your fleet. By monitoring driver behaviour, fleet managers can gain valuable insights into fuel consumption.
It will allow them to identify and act on behaviours that lead to unnecessary spending on fuel. Unproductive use of your fleet also contributes to fuel wastage. With Geotab’s route optimization tool, fleet managers can route their drivers to carry out deliveries efficiently, ultimately leading to reduced fuel consumption. Read more on how to increase fuel efficiency with MyGeotab.
2. Use Route Optimization to Increase Productivity and Cut Overtime
At a time when companies are trying to maximise profits, drivers spending additional time on the road can be costly. Geotab’s fleet management system provides the tools to optimize your driver routes, enabling fleet managers to make informed decisions by minimising driving time and ensuring drivers meet the delivery deadline. This will help reduce unnecessary stops and eliminate wasted time as productivity increases. Read more on how to improve fleet efficiency.
3. Go Paperless
Another way to reduce your business costs is to manage your fleet through the web. Based on research conducted by CEO Image Systems, a paper-based administration’s average cost can be as high as 25,000 USD to fill the entire cabinet as well as 2,000 USD each year to maintain it. Therefore, using a web-based administration software like MyGeotab can help you cut costs on printing paper and filing.
4. Use Telematics to Negotiate for Better Insurance Premiums
Employing telematics comes with many advantages. Aside from enabling you to monitor your fleet and drivers in real-time, it can help you reduce the insurance premiums of your fleet. Fleet managers can present all of the data recorded by the Geotab fleet management system to negotiate better premiums based on improved driving behaviour.
5. Ensure Your Vehicles Are Maintained Regularly
Telematics data generating abilities can go as far as to providing information on the health and performance of your fleet. From harsh braking and acceleration to engine status, tracking vehicle maintenance using fleet management hardware and software can not only ensure the safety of your drivers and vehicles, but assists in avoiding unforeseen expenditure due to poor maintenance schedules on mobile assets.
Author: Nettie Kruger: Senior Debtors Controller – Geotab Africa
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