Time Recording

In any business, it's essential to understand your employment costs.

Employment costs have increased such that they form a considerable proportion of any company's cost base. This is true of both direct and indirect costs. It becomes even more important where employees spend their time on some direct work, and at other times they are an overhead.

Realising that you need to analyse the time spent on direct work isn't a new idea. Everyone can see the value of understanding how long and how much it costs to make the products or services that you supply to your customers.

Making sure that you utilise resources efficiently is clearly important. And of course by examining recorded time you can see other trends on down time or sick leave as well as the more important information on direct costs of production.

It is also valid to explore the amount of time that your indirect staff spend on the activities set for them. What are your marketing staff doing with their time? Are they working on projects that you want them to move forward? Or does their time get dissipated on other less important tasks?

The same analysis can be undertaken in the finance area. Are your senior finance staff spending their time on journal entry that should be done by more junior and therefore cheaper staff? How much analysis are your senior members of staff doing as opposed to transaction processing. Should you review your procedures to improve the amount of time that staff spend on value add tasks?

How do I find out what my staff are doing?

Just asking them to fill in a timesheet is not going to give you the answers you require. In the direct area there will usually be a job number for staff to use so you know which job they are working on. This allows the analysis of which jobs take longer than others to help understand why this is happening, where improvements can be made, and of course to price your work for the customer.

A similar structure can be applied for overhead functions. Market research can be a 'job' or 'project', as can email campaign or direct mailing. This way you will understand where your human resources are spending their time.

Will my staff want to record their time?

Yes and no! If they feel that you are spying on them so that you can weed out the weak links in the organisation then they will feel alienated by the system, and not only resent it but may not accurately record their time which will lead to poor management decisions.

If they believe that the data recorded is allowing better allocation of resources, to increase the profits of the company to protect their jobs and to make their working life as useful and enjoyable as possible then they shouldn't feel that it is too onerous. However it shouldn't be in too much detail, such that the staff spend all their time recording time rather than working on those added value tasks.