Administrative Productivity Market Survey

By: Insperity Staff
January 31st, 2011

The 411 on Administrative Productivity
Regardless of what industry they’re in, how many employees they have or how sales are going, one thing all business owners want is a tool that will make their daily operations run a little smoother. Think about some of the advances that have helped you work more efficiently through the years. E-mail revolutionized business communications. Social media gave companies an entirely new and completely free marketing platform. Smart phones (for better or worse) allowed us to take the office with us on the go. All of those tools have one thing in common: technology.

According to the U.S. Bureau of Labor Statistics, workers have increased their productivity 4 percent annually since 1979, and much of that is due to advances in technology. From software to handheld devices, business technology solutions are making it easier to do our jobs, and in turn get more done.

The same holds true in the realm of human resources. Whether it’s administering benefits or running payroll, there are numerous HR functions that are made simpler through technology. Let’s look at two of these: expense management and time and attendance. It’s possible that you’re still tracking expenses on paper, or perhaps you’re using antiquated time-clock software to monitor employees’ work hours. The question is why?

“Using paper-based systems for time or expenses allows for many mistake points that normally don’t exist in automated solutions,” says Eric Brown, a Texas-based technology consultant and entrepreneur who focuses on helping organizations merge business, technology and marketing.

For example, he says, using a paper-based time and attendance system means an employee is providing their hours to their manager or HR professional who then has to enter them into another system or software platform.

“This double entry is prone to errors even with the most careful of data entry personnel,” Brown says.

And those mistakes can be costly to a company.

The Current Landscape
Software tools to handle both expense management and time and attendance functions have made tremendous strides in recent years, becoming more intuitive and more interactive with other solutions. And businesses are taking note.

According to an annual report on business travel and entertainment from the Aberdeen Group, 53 percent of organizations put a high priority on expense management in the current economy. Of the companies that report having a 31 percent higher rate of policy compliance than their peers, nearly 50 percent are more likely to instantly scrutinize travel and entertainment spending against their budget and 43 percent are more likely to audit expense reports.

In a separate Aberdeen report from 2008, the primary reason companies seek out human capital management strategies is to increase productivity. The number one method they’re using to do this is linking pay to performance, and the primary tool 79 percent of them are implementing to achieve that goal is a time and attendance system.

“Software solutions can provide cost savings, both in time for personnel to enter data and in fewer mistakes,” Brown says.
Expense Management:

• Reduce instances of expense fraud.
• Easy-to-understand workflow approval that may go through several layers of people within a matter of minutes.
• Make it easier to see how money is being spent and on what types of services via comprehensive reports.
• Most systems allow users to attach scanned receipts to verify the expense. Some even allow you to attach photos of receipts taken with your mobile phone.
• Automated system cuts down processing costs and is more efficient than manual expense reporting.
• Most systems allow administrators to set parameters for what can be expensed and what cannot, increasing policy compliance.

Cost Requirements

The costs associated with administrative HR software typically depend on the number of users. For time and attendance, that often means paying based on the total number of employees.

For expense management, that typically means a price based on the number of regular expense filers, on average about 25 to 30 percent of the total number of employees.
Do you need it?

Do you have a lot of paper flying around? Working with paper expense reports and timesheets is tedious and error prone. Many companies require multiple approvals on each — immediate managers as well as HR managers for instance — before an anything is paid. If there are numerous expense reports or timesheets, keeping track of the paper trail can be difficult.

Are employees not getting reimbursed in a timely manner? If it’s taking your employees more than a week or two at most to get reimbursed for their expenses, that’s unacceptable. Business-related expenses should not weigh down an employee’s personal finances and it’s up to you to make sure that doesn’t happen. If employees repeatedly have to fight to make sure their expenses are paid in a timely manner, they’ll likely to become disengaged quickly.

Are employees abusing the time clock? According to a 2008 report on occupational fraud and abuse from the Association of Certified Fraud Examiners, small businesses are more vulnerable to payroll fraud (14 percent) than businesses on the whole (9.3 percent). The same study estimates that U.S. businesses lose 7 percent of their annual revenue to fraud. If you’re relying on paper timesheets or manual data entry, you’re exposing your business to intentional fraud and less onerous “rounding,” which allows employees to enter work times in accordance with expected hours instead of when they actually started and stopped working.

Are your systems talking? Some of the expense management and time and attendance software products now on the market can integrate easily with your accounting, payroll and other systems, eliminating the need to manually port data to run reports or accomplish another task. For instance, Galaxy Technologies’ TimeStar software is able to integrate data flows with hundreds of external applications. Nick Venturella, sales and marketing coordinator for Galaxy, says that integration capacity is a major plus for the product.

“We believe that elimination of dual-entry and seamless automation of HR and labor data flow between applications are key to an efficient, error-free and user-friendly implementation of time and attendance,” he says.

Do you need expense reports with different allowances for different employees? Oftentimes the rules around expenses are different for managers, executives and other employees. Many expense management systems enable you to set the parameters of what’s allowable — and what will raise a red flag — depending on the employee’s position.

Would automating either expense management or time and attendance make your or your manager’s job easier? Combing through expense reports, verifying work hours and simply handling all of that paperwork can take a good chunk out of the workday — time that you or someone else could be spending on other tasks that help build your business. With time and attendance alone, it’s estimated that it takes supervisors on average two to five minutes per time sheet to review and check for errors. Multiply that by 30 or so workers and you’re looking at more than two hours just to evaluate, not including the time to actually run payroll.
Implementation

What’s Involved: Once the decision has been made to purchase a time and attendance or expense management solution, your company will first need to decide what options make the most sense and then evaluate vendors. This can take some time to do right. After a decision has been made, your company may have to purchase equipment and get set up to adopt the new system, if it’s an enterprise solution. But with SaaS, there is no software to install, no equipment to buy and essentially no bearing on a client’s internal IT resources. Some staff training will also be involved, though many systems are intuitive so this shouldn’t need to be intensive.

The Disruption Factor: Any time a company changes the process for handling a major HR function, there’s going to be a period of disruption and confusion.

“When trying to decide whether to move to a software solution, the main question that must be answered by the organization is ‘Am I willing to go through a short time of chaos to get to the longer term solution?’” Brown says.

Brown argues that once the company overcomes those initial headaches, the payoff will be well worth the trouble.

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