WHITE PAPER Six Tips to Help Reduce Costs and Boost Productivity

Transcription

1 WHITE PAPER Six Tips to Help Reduce Costs and Boost Productivity Unlock the total value of workforce management technology

2 INTRODUCTION DO ANY OF THESE CHALLENGES SOUND FAMILIAR? Do your payroll costs frequently exceed budget expectations? Is your per-employee net income below the industry average? Do you have variances that you can t explain? If any of these challenges sound familiar, read on, because the latest workforce management capabilities could represent a serious opportunity for you to reduce labour-related costs and boost your productivity. We needed an innovative approach to running the business and managing our team. The Kronos solution was exactly what we required it gave us control and visibility over our workforce as well as the ability to grow. Thinner margins. Stronger competition. Increasing legislation. Economic pressure. Higher wage demands. These are just some of the challenges that are driving all organisations to find new ways to reduce costs, increase productivity, and improve compliance. When staff costs represent the largest controllable expense to your business, optimising your use of labour is essential if you are to remain competitive. The next great opportunity The need for organisations to identify inefficiencies and drive performance improvements has never been greater. The opportunity to meaningfully reduce operating costs and increase productivity lies in focusing on the workforce given that it s your employees that represent one of the largest costs to your business. By implementing workforce management the automation of labour-related functions such as workforce planning, labour scheduling, time and attendance, absence management and performance monitoring, or by taking some simple next steps with existing workforce management systems, all organisations can realise rapid and significant bottom-line results. The six quick tips that follow shed light on ways to manage your workforce more effectively, so you can achieve better business results. Even during tough economic times. Hint: If you re already using a workforce management system, you may wish to skip ahead to Tips 3, 4, 5, and 6. Duncan Rouse, Operations Manager Hall & Woodhouse 2

3 TIP #1: PUT SYSTEMATIC CONTROLS IN PLACE TO PAY EMPLOYEES ACCURATELY AND FAIRLY Is your current timekeeping system costing you money? Does it administer complex pay rules accurately and fairly, without the need for manual intervention? Problem: Without sufficient controls, you run the risk of paying your workers incorrectly. What s at the bottom of this risk? Complex pay rules associated with factors such as: Metrics used to measure productivity Two of the top three metrics used by organisations to measure productivity are revenue per Full-Time Equivalent (FTE) and also profit per FTE as seen in an Aberdeen Research paper. Overtime including overtime in holiday pay Premium time Government laws and regulations Collective bargaining agreements Organisation policies Pay your workers too much and you negatively impact results. Unsurprisingly, employees rarely flag overpayments to your payroll department. Pay them too little and you put the organisation at risk of union grievances, employee dissatisfaction and a loss in productivity. Case in point: An employee works four hours of basic time on a late shift and then works two more hours during the night shift. Without an automated system, managers must keep complex pay rules in their heads. Is it just four hours of basic time and two hours of night premium and then he s back on basic time tomorrow? the worker s manager might ask themselves. Or does the employee contract require that we award premium time for the remainder of the 24-hour period? % of Respondents, n=480 80% 70% 60% 20% 10% 0% 62% Revenue per FTE* 54% 48% Service level achieved Profit per FTE* 42% Sales quota achieved 32% 31% Human capital Return on Investment Mean time to resolution Unit of service Solution: Stop the guesswork, automate and enforce your pay rules with a time and attendance solution. It can be configured to capture your organisation s own rules, contractual rules and regulatory rules up front. These rules can be called upon over and over again, enabling the system to automatically administer even the most complex pay calculations. Accurately, fairly, and consistently. The result? The virtual elimination of the underpayments and overpayments that lead to organisation risk. A combination of benefits that can save your organisation money, boost the morale of the Payroll Department and employees alike. Source: Aberdeen Group, January *Full-Time Equivalent 3

4 TIP #2: REDUCE INFLATED PAYROLL BY ELIMINATING FRAUDULENT CLOCKING How much money and productive time are you losing to inaccurate time recording and fraudulent clocking? Automation of WORKFORCE MANAGEMENT processes Aberdeen Group research shows the parts of the workforce management processes organisations have typically automated and Time and Attendance is close to universal. It is the most mature of the business processes and has the most direct impact on an organisation costs and employee pay. Are you sure that the person you scheduled to work has the appropriate skills and worker certification, has arrived on time and is the one performing the task? Problem: Fraudulent clocking the widespread practice in which one employee clocks for another to hide a friend s lateness or absence has been found to inflate payroll and can be hard to manage. For organisations that employ remote workers or have manual time recording systems (paper or electronic timesheets) this issue can cause even greater difficulties. In extreme cases your organisation could be paying for work that was never completed, or for people that are no longer on your payroll. Solution: Fortunately, fraudulent clocking can be reduced in several ways when you use an automated time and attendance solution to help verify the identities of the employees clocking for duty. The approaches listed below are shown in descending order of effectiveness: Fixed Terminals % of Respondents, n=480 80% 70% 60% 20% 10% 0% 77% Time and Attendance 68% Time Clock 66% 62% Schedule Absence/ Management Leave Management 57% Labour Analytics 53% Labour Forecasting Biometric verification: Terminals match fingerprints (binary representation of fingerprint) to employee record to confirm identity. Badge swipe, PIN entry, and personal data: Employee swipes a badge and enters a unique PIN. To dissuade employees from sharing PINs, some Kronos customers have configured terminals to reveal the badge and PIN owner s personal pay data to the badge holder upon PIN entry. Badge swipe and PIN entry: An effective approach, although some workers may choose to share PINs. Badge swipe alone: More effective than a manual system, but employees can still share badges. Source: Aberdeen Group, January

5 Cloud, mobility and integration in WFM automation The Aberdeen Group research study shows that half of organisations surveyed have some form of integration between their WFM systems. The integration becomes especially important with organisations that want more analytical capabilities for their labour data. Mobile/Tablet Mobile/Tablet device with geo-fencing: Employees sign-in to an application on their smart phone or tablet device and are allowed to clock-in and out, and record their work activity, only if they are within a pre-determined radius of their designated place of work. Manual timekeeping practices are the most vulnerable to abuse. An automated timekeeping solution can help eliminate the payroll inflation that results from fraudulent clocking. Biometric identification and verification technology that confirms the identity of the individual and secures access to their personal self-service data. TIP #3: SHRINK ADMINISTRATIVE OVERHEAD AND EMPOWER YOUR EMPLOYEES TO SERVE THEMSELVES How much time do your supervisors and human resources managers lose each week researching and responding to administrative queries from employees? % of Respondents, n=480 20% 10% 0% Integration between WFM solutions Source: Aberdeen Group, January Using or plan on using Cloud 47% Mbility in WFM Problem: If your HR team and frontline supervisors are like most, they often get stuck responding to employee questions about payroll, holiday time and related issues. Hardly the most productive use of their time. Solution: Why not let your employees get the information they want themselves in a way that doesn t impact productivity? Give your employees access to their own payroll data, work hours, holiday accruals and other information using self service capabilities integrated into terminals, mobile/tablet applications, PC-based workforce timekeeper software, on-premise kiosks, and other interfaces. Many Kronos customers find that the break room is the ideal spot for a self-service kiosk. Access to PC-based self-service functions can also be restricted to break times or off hours. 5

6 TIP #4: GAIN CONTROL OVER THE COSTS OF EMPLOYEE ABSENCE How much is employee absence costing you? You d be surprised... With the labour data collected in Kronos, we now compare actual hours to the standard... This will help increase profitability, because we have a better hand le on our cost structure. Lynne Schreibel, Global Kronos Manager Joy Global Problem: According to data from the Conference Board of Canada, employee absenteeism cost Canadian companies $16.6 billion in direct cost. The average rate of absenteeism is 9.3 days for a full-time Canadian worker. And indirect costs replacement, lost productivity, and so on are estimated to be two or three times as much. Can you measure or management that cost today in your own organisation? Solution: Use an absence management system to help you gain visibility into absenteeism trends and to shine a light on workers who exhibit problematic attendance patterns. With an advanced absence management system you can take steps to minimise employee absence, eliminate abuse of time-off rules and increase productivity. Moreover, the system gives you the power to automate and enforce holiday and sick policies as well as government, union and contractual leave rules. You can reduce the costs associated with extended employee absence, facilitating the simultaneous use and tracking of leave and accrued holiday time and automating payment of holiday, sick, and maternity/paternity benefits to help avoid the risk of noncompliance. TIP #5: USE OVERTIME THE RIGHT WAY Is your organisation making use of overtime in the best way possible? How would you know? Problem: Overtime is a great way to flex your workforce to increase capacity, as needed, to meet customer demand and SLAs. Sometimes, the use of overtime can mask problems that, if left undiscovered and unchecked, can cause ongoing damage to productivity and competitiveness. Perhaps overtime is being used to make up for high levels of absenteeism, poor visibility of customer demand, low productivity or little visibility into employee workload. When managers don t have sufficient insight and controls in place to use overtime in the most efficient and appropriate manner misuse can occur, and some managers and employees may treat it like a benefit. Solution: Did you know that an automated time tracking solution can provide up-to-date reporting your managers can use at any time to see and understand where and how your overtime is being used? A workforce management solution will give you visibility into the utilisation of labour and resources, permitting you to monitor key workforce performance indicators. Drill down into the data to determine the actual root causes of overtime use, enabling you to take instant action to improve your operations. 6

7 TIP #6: APPLY LEAN AND SIX SIGMA TO YOUR WORKFORCE Have you taken a page out of the manufacturing industry rule book and implemented continuous improvement programmes like Lean and Six Sigma to reduce waste and optimise your processes? Problem: Many organisations have successfully employed these techniques to achieve important goals such as quality improvement and inventory reduction. However, the same firms have often overlooked the opportunity to apply these techniques to carve out the workforce-related waste that remains hidden in their variance reports. In fact, lurking within many workforces lies a tangle of inefficient practices and processes ripe for analysis and improvement. Solution: Focus Lean and Six Sigma techniques on your workforce. Workforce management solutions give you the power to precisely measure the time employees spend on direct and indirect activities. You can zero in on the root causes of low productivity, such as insufficient training or supply chain issues and you can use these analytical tools to quantify the impact of high overtime or absenteeism on productivity. Taken together, these capabilities give you the means to measurably boost productive time in your enterprise. And to align the performance of the workforce with your strategic organisational goals. So you can measure and manage labour productivity in the context of target outcomes such as better margins and service delivery. HOW WORKFORCE MANAGEMENT TECHNOLOGY CAN WORK FOR YOU Taken together, these capabilities give you the means to measurably boost productive time in your organisation. In so doing, you have an opportunity to control costs more effectively than ever before and deliver significant savings. Better workforce management practices and the implementation of workforce management technology can give organisations greater control and visibility of the performance of their workforce and equip them with the tools to enhance future growth. PUT THE TIPS INTO PRACTICE... Find out more about how Kronos can help you trim expenses, enhance productivity and boost profits. Call us today at or visit Kronos Incorporated. Kronos and the Kronos logo are registered trademarks and Workforce Innovation That Works is a trademark of Kronos Incorporated or a related company. For a full list of Kronos trademarks, please visit the trademarks page at All other trademarks, if any, are property of their respective owners. All specifications are subject to change. All rights reserved. CV0591-CA-ENv2