Time & Attendance Return on Investment

Time & Attendance and Return on Investment

Working as an independent time and attendance consultant exposed me to a wide range of businesses and business owners. Different businesses can have different requirements, but there are some common objectives.

Profit is, of course, the main objective of both privately and publicly owned business but in this regard, publicly owned businesses are somewhat conditioned by demands of the shareholders to focus on what is the best indicator of any investment - Return on Investment or ROI.

It was this regard that John (a client of my earlier consulting business) struck an impasse. He looked at business systems simply based on cost rather than ROI, and it prevented him from implementing systems designed to save time and money.

John had a contracting business that employed 200 staff. His employees were mostly remote workers, and wages were his major cost. He was concerned about employee time theft but also the cost of processing manual timesheets and calculating the weekly payroll. 

After looking at John's attendance and award interpretation requirements, I recommended a system which met his needs and promised to reduce processing costs and time theft. The system required an investment of around $15,000 but simultaneously provided a reduction in administration costs and eliminated employee time theft estimated at as much as 1% of annual wages costs.

In John's business annual wages were nine million dollars. One per cent of this is $90,000. Given the investment of $15,000, this represents a 600 per cent return on investment in year one. That is a compelling argument for investing.

However, John was hesitant. He understood the equation and confirmed the cost savings were realistic, but he baulked at the investment. Partly this was due to the influx of cheap time and attendance products from China which looks on the surface to be a practical alternative but in reality, does not actually deliver the time-saving benefits of more robust systems. 

It took some time before John purchased the system and unsurprisingly his investment very quickly provided the expected ROI. By his own admission, the delay in purchasing the system simply resulted in employee time theft and additional admin costs for that period of indecision. Ironically, the costs exceeded the actual cost of the system.

In any business, there are two opposing but equally significant and potentially costly factors which relate to the purchase of new business systems and they are acting without due diligence and inaction. Decisions must be made to move forward and, if the solution meets the requirements and the ROI is clear is time to make the decision and move forward.


The Time & Attendance Consultant



 

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