Creating Competitive Advantage through Talent Development
In highly competitive industries such as consulting, finance and marketing there are significant cost implications as a result of inefficiencies. The most common cost to organizations is employee downtime, time spent researching concepts, not being proficient in required skills, not having immediate access to information, relying on others for critical conceptual information and taking time out to teach core skills. These costs are often overlooked.
A primary reason companies struggle is the inability for all employees to contribute efficiently and effectively. In many instances companies are under staffed and cannot afford to have a member of the team not contributing. The cost is typically one of an inefficient use of time and as we all know, time is money. To that end the company would be much more profitable if every employee had the knowledge and ability to effectively perform their role and contribute.
Middle managers may accidentally use the wrong information at least once a week and miss information of value to their jobs almost every day. One quarter of their time is spent searching for information, half of which is of no value to them. This has a trickle down effect. If managers are spending their time processing inaccurate information then they are probably dedicating resources and personnel to the inaccurate information. Now the problem has grown exponentially because an entire team, business unit or organization is dedicating time and resources toward the wrong information.
When surveyed, managers said they believe they could be twice as efficient if they eliminated rework. Rework can be described as having to discard work because the information is incorrect. The difference between rework and a useful draft is the useful draft is reviewed and improved upon. Rework, on the other hand is typically discarded before it gets to the review process. For example, if someone assembles a financial model with formula mistakes the entire model has to be redone and cannot be interpreted until the changes have been addressed.
If rework documents makes it up the chain it is a tremendous waste of time. The manager now wastes precious time on interpreting misleading and useless information. Additionally, rework has an adverse effect on the manager’s confidence towards the employee. The manager will undoubtedly lose confidence in the individual or team who turns in rework quality material. The manager has to now consider making modifications to the team structure in an effort to deliver a high quality product. The manager might have the employee continue to assemble financial models and run the risk of errors or adjust team responsibilities by re-directing the work to another resource on the team or look to completely replace the individual. All of these options take time away from the manager and disrupts the team dynamic.
Just think about what you could do with the time savings. With a more efficient company, the obvious option is to have a leaner and more productive organization. Profitability would increase if the firm is able to maintain the same level of productivity with fewer employees. Interestingly, when surveyed, 81% of managers said they would spend the time savings on business development and client stewardship. The manager is thinking about further increasing company revenue.
Calculating the savings a company could have on an annual basis accumulates into substantial dollar savings as well as full time employee equivalent gains.
In evaluating salary per hour we will assume a 40 hour work week and that the individual will work 50 weeks a year. With this approach we understand salary level for typical roles within organizations.
Savings per year
If a company is able to achieve savings of .03% daily, that translates to 5 hours in gained efficiencies monthly. With this approach we are able to calculate the annual dollar time savings per employee by role.
Typically are set up as a pyramid or hierarchy of power. The executive team sits at the top of the pyramid. Individuals at each step of the pyramid employees have different roles and levels of responsibilities. In this scenario we are going to evaluate an organization with 1,000 employees distributed in a pyramid model.
As a company with 1,000 employees you can look to save approximately $1,368,000 based on the assumption and parameters.
BridgePrep can help reduce the need for constant mentoring and searching for information. This solution will also limit the amount of rework thereby allowing managers to spend more time focused on business development. Also, the mentoring sessions with employees can be more productive when the manager is easily able to understand developmental need. The result is a much more effective conversation.