The cost of doing nothing

A lot of people I talk to ask me of the potential cost savings they can achieve from automating their time capture and the related payroll processing. Depending on how manual your processes are and who’s figures you use, you should expect a savings of around 2-5 percent of your annual gross payroll spend.

While this may not sound like a big number, consider a company with a 100 million dollar annual payroll… or what about a company with a 300 million dollar annual payroll? Wouldn’t it be nice to increase your bottom line by 5 million or 15 million dollars respectively?

Given the cost of buying and implementing a good Workforce Management solution, companies should be seeing a return on their investment in less than 12 months. Those that are not seeing any sort of return, or who are not live yet, even in pilot, are doing something wrong.

So at a minimum, the cost of doing nothing is at least the lost potential savings… but there’s more. Many companies fail to recognize the price of reduced risk and exposure in terms of liability. Odd, given the level of attention to corporate governance in today’s climate. But what is this worth?

Last year an executive at a regional hospital told me that their auditors put a nine million dollar liability adjustment on their books because they had no way to defend an action if any employee quit and asked for vacation pay dating back to the date they started. Can you imagine that? This was enough of a driver for them to automate their manual processes… the savings were just icing on the cake.

Its natural for us as humans to tend to the squeakiest wheel… but when this wheel squeaks, it may be too late and then you’ll be kicking yourself in the butt, while trying to get something in place in an unrealistic time frame and set your self up for further failure.

This I think, is the biggest cost of doing nothing.