| In any business, it's essential to understand your | | | | give you the answers you require. In the direct area |
| employment costs. | | | | there will usually be a job number for staff to use so |
| Employment costs have increased such that they | | | | you know which job they are working on. This allows |
| form a considerable proportion of any company's | | | | the analysis of which jobs take longer than others to |
| cost base. This is true of both direct and indirect | | | | help understand why this is happening, where |
| costs. It becomes even more important where | | | | improvements can be made, and of course to price |
| employees spend their time on some direct work, | | | | your work for the customer. |
| and at other times they are an overhead. | | | | A similar structure can be applied for overhead |
| Realising that you need to analyse the time spent on | | | | functions. Market research can be a 'job' or 'project', |
| direct work isn't a new idea. Everyone can see the | | | | as can email campaign or direct mailing. This way you |
| value of understanding how long and how much it | | | | will understand where your human resources are |
| costs to make the products or services that you | | | | spending their time. |
| supply to your customers. | | | | Will my staff want to record their time? |
| Making sure that you utilise resources efficiently is | | | | Yes and no! If they feel that you are spying on them |
| clearly important. And of course by examining | | | | so that you can weed out the weak links in the |
| recorded time you can see other trends on down | | | | organisation then they will feel alienated by the |
| time or sick leave as well as the more important | | | | system, and not only resent it but may not |
| information on direct costs of production. | | | | accurately record their time which will lead to poor |
| It is also valid to explore the amount of time that | | | | management decisions. |
| your indirect staff spend on the activities set for | | | | If they believe that the data recorded is allowing |
| them. What are your marketing staff doing with their | | | | better allocation of resources, to increase the profits |
| time? Are they working on projects that you want | | | | of the company to protect their jobs and to make |
| them to move forward? Or does their time get | | | | their working life as useful and enjoyable as possible |
| dissipated on other less important tasks? | | | | then they shouldn't feel that it is too onerous. |
| The same analysis can be undertaken in the finance | | | | However it shouldn't be in too much detail, such that |
| area. Are your senior finance staff spending their | | | | the staff spend all their time recording time rather |
| time on journal entry that should be done by more | | | | than working on those added value tasks. |
| junior and therefore cheaper staff? How much | | | | Is it expensive? |
| analysis are your senior members of staff doing as | | | | It doesn't have to be. Sage and Quickbooks have |
| opposed to transaction processing. Should you review | | | | add-ons, and there is a plethora of software systems |
| your procedures to improve the amount of time that | | | | that will allow you to collect and evaluate the data |
| staff spend on value add tasks? | | | | that is collected. Just pick a system that suits your |
| How do I find out what my staff are doing? | | | | needs. |
| Just asking them to fill in a timesheet is not going to | | | | |