Step 1: Know your Direct & Indirect Labor Costs.
Direct costs include wages for employees and direct transaction costs such as BPO labor that is attributed to a client or business unit. Indirect costs are items such as utilities, rent, etc. Indirect costs may also include supervisor and executive salaries. You'll have a much better understanding of a client's profitability if you're able to compare it to a thorough number of overall costs.
Step 2: Track Employee Time.
Tracking employee time by task and client allows you to measure the productivity of an employee while also tracking the total number of hours a task took to complete for a specific client.
Step 3: Utilize Business Process Outsourcing.
BPO firms thrive at process management and rely on closely monitored production tracking and incentives to yield sizable productivity increases at typically lower costs.
Step 4: Allocate Indirect Labor.
The proportional allocation method will give you a bette sense of which clients are adding to your bottom line by assigning a percentage of an indirect costs to all or several departments or revenue categories (clients) in your business.