What’s the Situation?
The principle underlying technological progress is simple: if a tool or technology is no longer the best (i.e. simple, optimal, cost-efficient, time-efficient and/or user-friendly), it should be replaced. Right?
Right. Although this principle is fairly straightforward, it seems that it isn’t entirely understood. Many businesses today do not seem to realize that many of their existing methods and tools are at the very least sub-optimal; in reality, most are outdated, inefficient and ineffective. Specifically, it is those tools and methods that have to do with workforce management; broadly, this encompasses scheduling, communication, time and attendance tracking and more.
Sadly, many business owners do not understand the extent of the damage they are inflicting upon themselves and their staff members by using these tools and methods.
In this article, we will be looking at what happens when businesses use sub-optimal tools to manage their workforce. What are the consequences?
We’ll be focusing on 4 key areas:
- The consequences of manually creating and managing schedules
- The consequences of manually tracking time and attendance
- The consequences of using multiple communication tools
- The costs of using sub-optimal tools and methods to manage your workforce
Listen up, managers, this is for you!
#1- Manually creating and managing schedules
[Note: the tools/methods referred to here are pen and paper and Excel]
1- Huge waste of time and money
Think about all the time it takes to:
- Make the schedule
- Manually update the schedule every time a change is made
- Communicate those changes to all staff members every time a change is made
- Distribute and redistribute the schedule every time a change is made (paper)
- Print, re-print, and re-send the schedule every time a change is made (Excel)
- For employees to call in every time they want to check their schedules
- Manually collect all the scheduling information: employee information, employee availabilities, employee preferences, time-off requests, shift change requests, etc.
Time = Money.
Not only are you wasting money on the quantity of time your employees spend doing these activities, but also on the quality of it. The time your employees spend on scheduling activities like the ones mentioned above is not time well spent; in fact, they are some of the lowest ROI activities. Instead, they could be spending that time doing something that contributes significantly and meaningfully to the goals of your business.
2- Increased risk of error
Manually creating and editing schedules is a recipe for error, and errors are a money drain.
- You accidentally over-scheduled an employee? That means payroll trouble and overtime fees. Ouch!
- You accidentally under-scheduled an employee? Prepare yourself for legal trouble and angry employees.
Additionally, scheduling errors have been shown to contribute to workplace conflicts, workplace stress and absenteeism. All of this is even more concerning if you consider that up to 88% of spreadsheets contain errors according to Market Watch.
Ask yourself: what are you doing right now to mitigate the risk of error in scheduling? Do you have any way to guarantee the validity of your scheduling information?
3- Safety concerns
I probably don’t need to tell you this, but here it goes: keeping all your valuable (and private) company information on paper or Excel spreadsheet is a recipe for disaster.
If you’re doing this, your information can be easily compromised. Who knows what could happen if someone gets a hold of that information… It’s even scary to think about.
Compare that to a cloud-based scheduling solution where all your information is in one place, safely stored.
4- Workplace chaos/confusion
Having a handwritten and manually updated schedule can get really confusing, really quickly.
- What happens if your handwriting is illegible?
- What happens if there are so many notes, nobody can understand the schedule?
- What happens if someone other than the authorized parties (i.e. managers/owners) makes changes to the schedule without permission? How would you even know?
- What happens if you lose the schedule and/or all your notes?
Suffice to say, it’s very easy to get lost.
5- Losses due to missing functionalities
In the past, scheduling was simply about arranging your employees’ hours. Nowadays, with the advent of modern scheduling tools, it’s about so much more. There are so many things that Excel/pen and paper scheduling can’t do that a modern employee scheduling tool can. Here are some of them:
- It CANNOT instantly create and publish schedules.
- It CANNOT automatically collect and process employee information, employee availabilities, employee preferences, time-off requests, shift change requests, etc.
- It CANNOT automatically collect key scheduling data like number of hours worked, labor costs (targeted, actual and predicted), sales data, weather information and others.
- It CANNOT automatically incorporate the above data into schedule creation (i.e. intelligent schedule creation).
- It CANNOT make recommendations to you based on this data
6- Data issues
To make a good schedule, you need to incorporate all the information relevant to schedule-making: employee availabilities, employee preferences, number of hours worked, working hours limits and more. The more information you have, the better the schedule.
As a manager, how do you keep track of all of that? And, how do you incorporate it into your schedules?
I probably don’t need to tell you that it’s a real pain to do manually. Why not allow an intelligent machine that automatically collects and incorporates the data for you?
7- Decreased employee satisfaction/engagement
Studies show employees prefer to use cloud-based, mobile scheduling solutions.
Employees that are not satisfied with the current scheduling tools tend be less happy and engaged (see here for the impact of employee dissatisfaction/disengagement). Not to mention, dissatisfied and disengaged employees are less productive, and more likely to quit their job (see here for a more detailed explanation of the effects of employee turnover).
8- Tool overload
If anything, Excel does one thing; provide you with a scheduling template. And that’s exactly the issue; you can’t do anything else in it. If you’re using Excel /pen and paper for scheduling, it means you’re also forced to use other systems and tools for your other workforce management processes.
#2- Manually tracking time and attendance
[Note: the tools/methods referred to here are pen and paper and Excel]
1- Waste of time and money
Think about all the time it takes to:
- Manually enter the amount of time worked for every shift of every employee: shift start/end time, break start/end time, etc.
- Record irregularities (employee tardiness, absences)
- Manually validate timesheets and timecards
- Verify that the time and attendance information is correct
- Distribute the information to your employees
2- Increased risk of time theft
With manual time and attendance tracking, there is no guarantee of time entry accuracy. How do you know whether your employees are accurately reporting their time worked?
Think about all the potential sources of time theft:
- Buddy punching – when employees clock in or out for a colleague who is not there.
- Timesheet fraud – when employees round up to the nearest hour or lie about hours worked.
- Break abuse – when employees take longer or more frequent breaks than authorized.
A recent study by Robert Half found that the average employee steals approximately 4.5 hours per week from their employer, which amounts to six full work weeks per year. A study published by the American Payroll Association reported that more than 75% of companies are losing money due to buddy punching.
Time theft is real, and it’s costing businesses thousands of dollars a year: small variations add up very quickly.
3- Lack of accountability
With Excel/pen and paper, there are no records or logs of changes made. As a manager/owner, without any means of recording changes, how can you remain accountable to your staff members? This is very important.
What happens if someone makes a change to an employee’s worked hours? Is there any way you can tell who made the change and what the change was? This is extremely important not only for security purposes, but for legal purposes as well.
4- Safety concerns
See comment made in previous section.
5- Increased risk of error
Similar to last section, manually tracking time and attendance dramatically increases the risk of error.
Time and attendance mistakes lead to payroll trouble, overtime fees, serious legal trouble, disgruntled employees, workplace conflicts, workplace stress and absenteeism.
6- Losses due to missing functionalities
If you’re manually tracking time and attendance, you are missing out on many functionalities modern tools have. For example, they:
- CANNOT automatically collect and store time and attendance information
- CANNOT make intelligent recommendations to you based on this information
- CANNOT automatically incorporate the above data into schedule creation (i.e. intelligent schedule creation).
#3- Using multiple communication tools
Communication is key in all businesses: you cannot succeed without proper communication.
Many business owners communicate across multiple platforms, such as:
- Facebook groups
- Google chats/Hangout
This is known as ‘decentralized’ communication. Here’s a more detailed explanation of the difference between centralization and decentralization.
Decentralized communication leads to:
- Company-wide confusion
- Huge waste of time/money
- Longer onboarding times for new staff
- Higher employee turnover
Let me illustrate using an example.
Let’s say your staff members communicate to each other across multiple communication platforms. For the sake of this example, let’s say that some employees prefer to chat via Facebook groups, some prefer to chat via text and others prefer to chat via e-mail.
Suppose one of your employees wants to make a change to his schedule: they want to swap a shift with a coworker. What happens then?
Let’s follow the chain of communication.
- In this case, the employee must communicate with the manager to see if she’s allowed to swap a shift: 1 MESSAGE
- Once approved, she must then send a message to all available employees across 3 different platforms. Depending on the number of compatible employees: anywhere from 3-15 MESSAGES.
- She must then communicate with each of the employees that expressed a desire to swap their shift: anywhere from 3-15 MESSAGES.
- Once an agreement has been reached, she must then contact the manager(s) again to seek their approval for the shift swap: 1 MESSAGE. If the manager rejects the request, the entire process must be repeated.
- Once complete, you (i.e. the manager) must update the master schedule, payroll info (if it applies), and republish the changes for everyone to see.
- Your employees must then acknowledge the new schedule.
Do you see where I’m getting at? So much time wasted and unnecessary steps taken…
When you consider that this process is repeated for every single shift change request, availability change request and request for time off, the picture becomes more and more worrying. Especially if you consider that the effect of wasted time is exponential.
#4- The costs of using sub-optimal methods to manage your workforce
In the 2 previous posts, we looked at the various drawbacks associated with using multiple communication tools and using sub-optimal workforce management tools; specifically, those tools relating to scheduling, communication and time and attendance tracking.
In this post, we will try to translate these drawbacks into actual figures, so that so that you can better understand the financial consequences of using sub-optimal tools and methods.
Let’s use the example of a common occurrence in businesses: an employee makes a shift change request.
Let’s examine all that is involved in making and processing such a request:
- Employee-manager and employee-employee communication to set up and verify the shift change request (see the previous post for a more detailed explanation): approx. 5-15 minutes
- Updating potential payroll information: approx. 2-5 minutes
- Updating the schedule: approx. 5-10 minutes
- Publishing the schedule: approx. 1-5 minutes
So, on average, it takes 15-20 minutes for a business to process a shift change request using. This is a conservative amount.
On average, 10% of a business’ workforce make shift change requests daily. Suppose that your business has 100 employees; that’s 10 employees a day making 1 shift change request every day → 10 shift change requests.
How long does it take to process a shift change request using a quality workforce management software? On average, 30 seconds.
I know what you’re probably thinking: “C’mon Sam, that’s completely unrealistic.”
Well, it isn’t unrealistic if you consider that every element of the shift change request process is done automatically and is thus immediate.
- Employee-manager and employee-employee communication to set up and verify the shift change request (see the previous post for a more detailed explanation)
- Updating potential payroll information: updated automatically → 0 seconds
- Updating the schedule: updated automatically → 0 seconds
- Publishing the schedule: one click → 5 seconds
So, let’s do some math.
Without quality scheduling software
- 15 minutes for a shift change request
- 15 minutes x 10 shift change requests/day = 150 minutes OR 2.5 hours/day
With quality scheduling software:
- 30 seconds for a shift change request
- 30 seconds x 10 shift change requests/day = 300 seconds OR 5 minutes/day
How much money are you losing?
Here is the calculation:
- Daily wasted time: 150 minutes – 5 minutes = 145 minutes OR 2.41 hours/day
- Daily wasted money: 29$/hour (average manager wage) x 2.41 hours = 70.08 $/day
- Monthly wasted time: 41 hours x 30 days = 72.5 hours/month
- Monthly wasted money: 70.08 x 30 days = 2 102.5 $/month
- Yearly wasted time: 72.5 hours x 12 months = 870 hours/year
- Yearly wasted money: 2 102.5 $/month x 12 months = 25 320 $/year
870 hours’ worth of wasted time a year, 25 320 $ worth of wasted money a year. And remember: this is a conservative amount.
My main objective in writing this post was to make you aware of the immediate and potential losses that come with using sub-optimal tools and methods. I hope that was made clear.
I also hope you can now see that the losses are too significant for you to ignore.
Now, the question remains: What are you going to do about it?