A Use Case in Calculating the Value of Workforce Productivity
The Productivity Problem
When you consider the trillions of dollars that have been invested in technology over the past decade, it would be fair to assume that productivity has improved by leaps and bounds. The problem is… it hasn’t. U.S. government data suggests that overall workforce productivity has only grown 1-2% per year during the tech boom.
If technology is getting better, then why do companies still struggle to see greater productivity gains on their investment? In our experience, it’s rarely a problem with the technology. Instead, the problem stems from a lack of definition around the real value of productivity and how it is achieved in the modern workplace.
Transforming Workforce Productivity
The massive impact of technology on business today means that companies need to make greater investments in IT to gain operational efficiencies and reduce risk wherever possible. True productivity is no longer just about “employee productivity,” it’s about “workforce productivity.” This means going beyond the individual productivity to address the workforce needs, the workplace environment, and supporting technology infrastructure that leads to better business agility and greatest return on technology investment.
Companies are eager to maximize the power of technology, however, without careful planning and ROI justification, any delay or misstep in implementing and leveraging new technology could have the opposite effect on their goals. When new technology doesn’t deliver the hoped-for results, companies risk significant financial loss, poor user adoption, and even the survivability of their business in today’s technology-driven landscape.
A Workforce Productivity Use Case
In this example, we’ll look at how one company began their workforce transformation journey by leveraging Office 365 to improve an area of the business that is critical to every organization – employee onboarding.
The first step in the HR onboarding initiative was to uncover the root cause of the problem through an in-depth discovery. By interviewing company stakeholders, department leads, and key individuals involved in the workflow, the company discovered that the problem was not just a technology problem, but it was also a people and a process problem.
The company did not have clearly defined roles and responsibilities – which led to confusion and assumptions around who was handling specific tasks. There were also issues with consistency and flow. Without a repeatable process, time was wasted reinventing the wheel with each new hire, and mistakes and rework were happening more frequently.
To throw more money at a highly ineffective HR platform wouldn’t get to the root of the issue. In fact, surfacing these pain points revealed that the right solution was something entirely different!
Office 365 – Enabling Workforce Transformation
By leveraging Office 365 – specifically Microsoft Flow, SharePoint, and Azure Logic Apps – the company was able to not only fix their immediate problem but also deliver real business value and enable Workforce Transformation over time.
This integrated solution could be leveraged across the organization, meaning individual departments and users were less likely to invest in redundant software solutions, leading to financial waste, increased security risk, and poor user experience due to lack of consistency and IT oversight. Additionally, selecting a solution based on a deep understanding, and empathy for, the pressures facing the workforce, the business was able to ensure a higher adoption rate.
Calculating the Value of Productivity
To take it a step farther, the organization built a compelling business case for the return of value for the new technology solution. At a high level, here is how this organization began to redefine the value of productivity within their organization.
This growing 500-person company was adding 50 people per year. The cost to onboard new employees could be reduced in the following ways:
- Costly Mistakes: The company needed to reduce the likelihood of missed background checks, leading to potential lawyer costs. After analyzing their data, it was estimated that this mistake was likely to happen 1x per year, leading to $25,000 in legal fees.
- Delay in process: A lack of automation in the workflow was leading to unreliable start dates for new employees. Their data showed that 1 in 4 employees started a day later than expected. With a $125 average hourly billing rate per employee, the company stood to lose $12,500 per year due to process issues.
- Need to hire more staff: As the company grew, the onboarding process was becoming more frequent and complex. The business had projected the need to hire 1 new HR coordinator every two years to keep up with demands. With an average yearly salary of $50,000, the company stood to spend $25,000 per year on additional staff to do work that could easily be automated.
- Time away from value-added tasks: In addition to automating mundane tasks, inefficiencies in process was also taking time away from value-added initiatives. With 5 different people from various departments (managers, HR, IT) involved in the onboarding process, it was estimated that each new person spends approximately 30 minutes on follow-ups, context switches, and unnecessary meetings for each new hire. With an average $125 billing rate for each of the 5 employees, that’s $15,625 wasted per year.
By developing a technology solution that would eliminate these issues, the company stood to save $78,125 per year. With the proposed technology requiring an initial upfront cost and low monthly costs, it was calculated that the solution would pay for itself in less than two years, and continue to drive significant value for many years to come.
In today’s fast-paced world, there seems to be a technology solution for virtually every business challenge, but not every solution warrants the cost. At SWC, we strongly believe in the importance of alignment. We surface pain points, identify potential ROI, and develop solutions that ALIGN the best people, processes, and technology to achieve our customer’s well-defined goals.
If you’re looking for a strategic partner who can help you discover, identify, and implement the right IT solutions for the greatest return on investment, contact us to learn more about our approach.