Return on Investment

Return on Investment

Increasingly, organisations are focusing on leveraging their most expensive asset – their employees. Many organisations are developing strategies that are more customer focused and hence, more people dependent.

It is important to ensure the right people are in the right place at the right time maximising productivity while reducing costly bottlenecks. This coupled with both employee and supervisor empowerment ensures that real information is available when it is needed to ensure workforce optimisation.

Nucleus research carried out an analysis of the ROI of an automated time and attendance solution in which 25 organisations achieved payback, on average within five months, with the savings on payroll error rates alone being over six times the cost of the systems’ implementation.

Elements of financial Return on Investment
Paper Reduction
Optimum software can reduce the cost associated with creating and distributing paper timesheets. Cost savings result from:

• Direct savings from reduced paper, printing, and distribution costs

• Indirect savings from time spent handling paper timesheets

• Paperwork Transfer

A big expense with a manual timekeeping system is that of transferring timesheets from one person to another. For example, the employee needs to get blank timesheets from the HR department. They fill out the timesheet and walk it over to their manager. The manager signs the timesheets and walks them to the payroll department.

A very conservative estimate of the direct time spent on simply transferring the paper timesheet around would be 2-3 minutes per employee each pay period.

Improved Data Quality
Manual timesheets must be typed into a computer in order to be processed for payroll. Whenever data is keyed into a computer from a hand-written document, errors will be made. These errors can cost you in many direct and indirect ways:

• Incorrect pay
  How many employees complain if they get overpaid? If even a small number of employees keep their overpayments, it is costing plenty. And when employees get underpaid and complain, issuing a new pay slip or adjustment is costly.

• Without accurate information, you lose the ability to perform useful decision support.
  Pay is the biggest controllable expense in most organizations. You should have accurate information about hours worked, departments worked in, etc. for your decision support.

Fewer Inquiries to the Human Resources Department
Our web solutions will provide useful information to employees online that is traditionally requested from the HR or payroll departments. By making this information available online, your HR and payroll departments will spend less time answering questions from employees and managers.

Fewer Payroll Corrections
Issuing new pay slips or manually calculating adjustments to pay is a very time consuming process. Good time sheet software will minimise or eliminate this problem by:

• Ensuring accurate data reaches payroll by checking all pay policies at the point of entry and approval

• Providing an online method for employees and managers to request corrections

• Automatically calculating adjustments when errors were made in prior periods

Eliminates Duplicate Data Entry
If your time and attendance data is being keyed into more than one system, you have a cost that can be easily eliminated. Check the following systems to see if any time and attendance related data is being double entered:

• Timekeeping system

• Payroll system

• Human resource system

• Work order / maintenance system

• Project management / tracking system

Quantifying the ROI of an Optimum Software System
The financial benefits of a Optimum system can be quantified in a spreadsheet utilising the headings outlined above. For example,

• Manual input of timesheets for each employee (Upto 7 mins per week per employee)

• Improved accuracy in payroll calculation (normally between 1 – 3% of payroll) in organisations’ favour

• Reduction in time theft (long lunch breaks, lates etc) – Upto 2 hours per week per employee

By inputting the amount of employees you have along with the average hourly rate for an employee (inclusive of social insurance etc), the average hourly rate for a supervisor, etc it is possible to create an accurate ROI for your organisation.

The Soft Benefits of Optimum are also considerable

They include advantages to employees such as:

1. Efficient, easy to operate time and attendance or flexi time system

2. Ability to query hours at their PC or clocking terminal

3. Ability to query leave etc at their PC or clocking terminal

4. Ability to book leave at their PC

5. Ability to retain control of their working time

6. Advantages to Management and HR include:

7. Easy to use method of managing time and attendance and/or flexi time system

8. Ability to electronically handle leave

9. Ability to electronically handle sickness

10. Ability to electronically handle different categories of employee

11. Staff empowerment significantly reducing ‘back office’ HR function

12. Time freed up to focus on more strategic HR issues

13. Vast reporting and analysis facilities assisting effective management

14. Satisfies Working Time Act reporting requirements

Advantages to IR include:

• Offering an attractive solution to employees

• Perceived as open and democratic

• Can facilitate both clocking and non clocking environments

Advantages to IT include:

• Web based system removes requirement for installation on employees PCs’

• Operates in snooze mode minimising resources required

• Full help desk facilities for all users