One of the biggest ‘offenders’ when it comes to artificially increasing labor costs is "Buddy Punching".

Buddy Punching is when employees enter time for each other.  For example, employee A, punches in or out for employee B, such that employee B benefits from receiving pay when they are not physically present or working.

Some people like to call this time theft but regardless of what you call it, you can bet its costing your organization a lot of money.  And as can be expected, in times of economic uncertainty, the incidence of buddy punching increases, as employees try to gain as much advantage (i.e. money) as possible.

According to Kronos , 19 percent of employees admit to buddy punching once a year, and these costs can reach from 1.5 percent to 3 percent of gross annual payroll.   Others suggest this could be as high as 5%.

Nucleus Research , a global provider of IT advisory and research services, found that 74 percent of organizations experience payroll losses directly related to buddy punching. Nucleus found that organizations can save 2.2 percent (on average) of gross annual payroll by eliminating buddy punching.

One McDonald’s franchisee with 85 locations in Venezuela claimed to have reduced his annual payroll spend for his 3,400 employees by 22 percent!  Now that’s what I call a Real ROI.

Imagine an organization with 5,000 hourly employees each making $10.00 per hour and working an average of 20 hours per week.  This translates to an annual payroll of 52 million dollars!  So a savings of just 1 percent would equal 520,000 dollars per year.  A 2 percent savings would result in just over 1 million dollars.

And the beauty here is that all the savings go direct to the bottom line.  For many companies today, this could mean the difference between finishing in the black or the red.

Try out your own scenarios and see how much money your organization is losing at www.entrypointglobal.com/buddypunching .

The sixty-four thousand dollar question is how do you prevent buddy punching and reduce labor costs?

Well really, the only sure-fire way is to implement biometric time collection devices like punch clocks.  A number of companies sell these devices today and the technology is well proven.  Couple this with a well implemented Time and Attendance solution and you can see even more savings.

What are you doing to manage your costs?  Are you sure your labor costs are not artificially inflated? The cost of doing nothing is higher than you think!

Unfortunately, nobody thinks about these things until its too late.  Or, they fail to seek independent and qualified advice/validation.

Take for instance Crouse Hospital and St. Joseph’s Hospital Health Center in Syracuse, and Faxton-St. Luke’s Healthcare in Utica and New Hartford, who each recently had class-action law suits filed against them by employees claiming the hospitals didn’t properly compensate them when they had to work through lunch breaks.

The federal Fair Labor Standards Act (FLSA) indicates health-care workers are entitled to a 30-minute meal or applicable compensation if the meal break isn’t possible, but health-care employees usually don’t get to take a full 30-minute meal break… hence the issue.

All 3 of the above hotels use an automated Time and Attendance system from Kronos , but we have no idea what version they are on or whether their systems were properly configured and validated.  Of course, we do know that Kronos’ system can, if configured properly, pay people according to the law and ensure compliance.

For people that have an automated Time and Attendance system, there is a presumption that they are automatically compliant.  The myth is that the software will ensure compliance.  But reality is that the software will only do what you program it to do, and this is where a number of companies inadvertently mismanage their risk.

I have been talking to a number of companies about performing compliance audits and surely news like this validates the position and importance of such reviews.  Especially in the current economic climate as employees scrutinize all deductions on their pay checks.

If you’re not sure about your organization’s compliance, I invite you to contact me and see how I can help you prevent million dollar law suits.  Call me at 1-416-252-1000.

We see this in almost every industry… granted, some are more suited for such employment swings than others.

But in the world of retail, we see too many reactions that appear to be knee-jerk or short-term, and it is these that cause some pretty difficult long-term pains.  I’ve long advocated the concept of staffing to your customer traffic but how can retailers do this when they are letting go of staff?  My suggestion is to not let go of the staff, rather, to focus on customer service and helping your customers buy.

Letting go of customer-facing staff can be a slippery slope as less people to serve your customers means longer wait times for customers, increased frustration for customers, and of course, significantly increased shopping cart abandonment.  This leads to lower sales at the cash registers.

The Mystery Shopping Providers Association recently published some pretty alarming stats about wait times.  They claim that the average wait time for service in a specialty store is 5 minutes and 38 seconds. Discount stores which are traditionally known for lower customer service came in at 6 minutes and 26 seconds… almost a full minute more!

These numbers are alarming as they indicate a problem for retailers which WILL be evident in their bottom line numbers.

For retailers looking to pump up sales this holiday season, especially given the economic mood and the consumer’s propensity to spend, the best thing to do is ensure you have staff, ready to help customers when they are in the store and ready to buy.  Of course, this is a balancing act so that you’re not overstaffed or understaffed, and this is precisely where a  well configured and implemented labor scheduling system comes in to play.

By balancing labor with customer traffic, retailers can expect to see a reduction in labor as a percentage of sales, as well as an uptick in top line sales, as customers that are well serviced tend to buy, and buy more.

This holiday season, what are you doing to set yourself apart from the competition?

The FMLA provides for up to 12 weeks of job-protected unpaid leave each year for an eligible employee for any of the following reasons:

• The birth and care of a newborn or adopted child;
• To care for an immediate family member (spouse, child, or parent) with a serious health condition; or
• To take medical leave when the employee is unable to work because of a serious health condition.

Employers should be evaluating how they manage FMLA requests and whether that process would stand up to any state or federal scrutiny.  Also, they should consider areas where the process could be automated or streamlined and where technology could help.

For example, many people don’t fully understand FMLA eligibility, or don’t have the necessary information to determine an employee’s eligibility.  To be eligible, an employee must:

• Have been employed with the company for at least 12 months;
• Have worked a minimum of 1,250 hours in the previous consecutive 12 months; and
• Have not already used the 12 available weeks of leave.

Often, to make this determination, a manual and cumbersome process is involved, which takes time, and is error prone, thus increasing risk and costs.  Obviously, an automated system of tracking and recording an employee’s actual work hours and time off helps with the data collection and validation, but unfortunately, not a lot of organizations have such a system.  Those that do, continue to have issues getting to the data in a timely manner.

The risk of not doing this right grows exponentially the bigger your organization is.

Can you say that your organization has this risk mitigated?

The report which is authored by Christa Degnan Manning and Koppel Verma, highlights some great insights on the need to choose an expert partner to help with your Human Capital Management (HCM) initiatives. 

Of course, I’ve long hailed the praises of independent third-party advice and the value of having somebody that knows what the heck is going on, looking out for your best interests.  Not only does it insure you get a solution that meets your business needs, it also prevents others from pulling the wool over your eye… not that anybody would intentionally do that :-)

The title of the report got me thinking, especially the “People Helping People” part.  It reminds me of the famous Ritz-Carlton slogan “We are ladies and gentlemen serving ladies and gentlemen” which embodies the values and ethics embodied by its late founder, the Swiss hotelier Cesar Ritz.

Anybody that has ever stayed at a Ritz-Carlton knows about the Ritz magic… the level of service is second-to-none, and the attention to detail is magnificent.

And its this level of personal service, care and attention that we embody in our practice at Entrypoint.  After all, we are a boutique firm and our key asset is our people and our customers, who obviously are people.

So, we are really people helping people in the truest sense of the term.

A bunch of honest, hard-working people, with a genuine desire to help other people.  We help them reach business objectives, overcome technical challenges, save money and increase their bottom line, as well as help them improve their level of customer service.

While I can’t say its necessarily an easy job, we certainly have the skills to do the job.  Its the challenge that really drives us, of course along with the desire to help some really good people.

In all my time working for the vendor, every client has always been interested in knowing the real scoop on any announced acquisitions.  Usually, we have ad-hoc meetings to ease everybody’s minds.

But then you see people begin to leave and the product roadmap changes.  Things go on hold (or so it seems) while the newly merged company tries to sort things out. Stories change, your key contact leaves and things become different.

The folks at HRchitect just posted an interesting blog about Taleo’s acquisition of Vurv.  It got me thinking about the recent acquisitions of Kronos and Workbrain also.  I can clearly see the logic behind a number 1 player acquiring the new and growing number 2 player.  It’s as classic Sun Tzu teaching.

In fact, I always believed that Kronos should acquire Workbrain.  But alas, I knew that wouldn’t happen, not because it would be a bad business decision, but because there were personalities at play and they always cloud good business decisions. It’s hard to say which company is better off now, or which company’s clients for that matter.

But I’d be interested to hear from others on what they think and what your expereince has been with your “new” vendor.

In reading more of the details on their website, it appears to be an integrated offering of their core Workforce Central Suite with the usual suspects like Time and Attendance and Scheduling (and a of course others) bundled in with the relatively recently acquired Unicru, now branded as Workforce Acquisition. But interestingly, the 2 case studies (Rock Bottom and Uno Chicago Grill) profiled on their website appear to be Unicru clients and I didn’t see any mention of an integrated solution or anything around Time and Attendance or Scheduling.

Are there any Dinning establishments that have such an integrated solution? If not, why not?

From my perspective, this is a no brainer. Being involved in the hospitality industry for over 15 years now, I know first hand how important labor management is.

But I also know that there haven’t really been any ‘good’ solutions. Sure there’s a bunch of point solutions but what we’re seeing now in the Kronos for Dining offering just might be what the chef ordered, so to speak.

I’m excited to see Kronos take this much needed step and look forward to helping our clients get the benefits they deserve from such a solution. Of course, software is only 20% of the solution so remember to focus on the business and all the other ’stuff’, not the product.

I assume most people already know what the FMLA is, but for those that are new to this, the FMLA is a federal law that governs how employers must act in certain situations where their employees require long term leave.  The act requires employers to provide up to 12 weeks of unpaid, job-protected leave in the year after the birth or adoption of a child; to care for a sick child, parent or spouse; or when an employee has a serious illness.

Its been 15 years since the law was enacted and its been an administrative burden to implement and manage, not to mention providing data to the DOL when being audited.  While I don’t believe the proposed changes will really reduce the administrative burden, it will provide employers with some more equitable terms.

A recent survey conducted by World at Work entitled FMLA Practices and Perspectives uncovered some interesting points about the prosposed changes:

72 percent of respondents strongly agree with requiring workers to notify employers in advance of taking non-emergency, foreseeable leaves; (I’m surprised it wasn’t 100% - which employer wouldn’t want this?)
61 percent strongly agree with requiring annual medical certification from employees when conditions last more than one year; (is this really necessary or is it to provide comfort in the face of uncertainty about an employee’s truthfulness? - what is the real value of doing so?).

60 percent strongly agree with requiring a fitness-for-duty certificate after return from intermittent leave to jobs that could endanger the employee or others, or that the worker may be unable to perform.(I can see this for light-industrial or heavy-lifting jobs but probably not applicable to things like office/knowledge workers.)  Anyway, some pretty good news for employers and not surprisingly, a majority of them seem to like the proposed changes.

I was surprised however to see that only 28 percent reported difficulties tracking intermittent leave… a number I’m sure must be much higher.  But this number could be misconstrued… there may be 72 percent who don’t report difficulties because they either don’t have many incidents or have a manual process in place that although innefficient, does the job.  Either that or most companies we’ve spoken to fall within that 28 percent :-)

Whether the proposed changes are good for business or not, the only way to properly manage them and remain compliant is to have an automated system, like a Workforce Management application that has a strong Leave Management component.  This will not only automate the manual processes, it ensures you apply the rules consistently across all employees, provides an easy to access audit trail and log of events, as well as makes life much easier for all aprties involved.

For few companies, this dream is a reality… for most, its just a dream. 

Where does your company sit?  When will you stop dreaming and start doing?  Do you know what it will take?  What it costs?  Where to start?

Did you know that you can’t schedule PT employees to work more than 22 hours per week if they work on a Sunday? Or that if an employee works part of their lunch they are entitled to double-time for that portion?  For example, if an employee is scheduled for lunch from 12-1 and they come back at 12:45 to work, you have to pay them twice their hourly rate for that 15 minute period.

As you can see, the Puerto Rico Department of Labor has very strict and specific rules around paying and scheduling employees.  It does not take lightly to big companies coming in and taking advantage of their people.  So if you get caught, you’ll pay the price… and pay dearly.

If an employee files a complaint and the DOL decides to audit your records, the audit process is very manual and cumbersome (but then which audit isn’t).  But if you have a manual system (like most companies) of capturing your employee’s time or creating schedules for them, the process will be exponentially costly and time consuming.  One retailer I know spent 6 months going through their manual timecards when the PR DOL came knocking on their door.

The good news is… as long as you schedule and pay people correctly, you won’t have any problems.

But how do you do that?  Do you have a good Workforce Management system with all the schedule rules and all the pay rules?  Can your system be configured to accommodate these rules or does it need some customization?  Can it prevent human error?

These are all things that you need to think about as part of your strategy for opening up a store in Puerto Rico.  Also, you need to consider whether your people really know and understand the Puerto Rico rules?  Do you have people on the ground that know them and can interpret them?  Do you have people that have been there and done it before?

No matter how much you plan and anticipate, you should expect that your first month will be a learning experience as you acclimatize yourselves to the way things are done down there.  Make sure you have the right team on your side and get all the facts before you plan and implement your strategy.

HR KPI would then refer to those indicators which look at the employees’ performance. These indicators would encompass the employees’ productivity, job satisfaction, initiative, work quality, teamwork, and so on. Looking at various KPIs would allow management to quickly and accurately gauge how the organization is doing, as a whole, and thus allow for insightful decisions and management choices.

HR KPI could also help the employees themselves to get a quantitative grasp on their performance and what aspects they need to improve upon. The consideration of these key performance indicators is basically just a way to keep track of the important aspects of organizational (as well as personal employee) performance. Employees could use these benchmarks to try and better their personal performance.

Groups and teams would also benefit from being able to look at and quantitatively measure not only individual member performance, but also their performance as a unit. This would enable the group to make adjustments both at the individual level as well as at the group level to further improve their performance (and hence their value to the company).

An awareness and understanding of these key performance indicators thus helps at almost every level of the company or organization. It becomes important to select the proper aspects of the organization to monitor, and the metrics or standards of measurement by which to gauge these aspects.

Some of the most important HR KPI’s are those related to workforce productivity. The exact meaning of productivity is of course dependent on the context of evaluation. Generally, the improvement of employee productivity over previous time periods is what is important to monitor and maintain. There is of course no absolute comparison for productivity, and this is why changes and improvements are what are measured.

Recruitment is another vital HR aspect to be aware of. Indicators here include comparisons between the average appraisal results of newly hired employees with the previous batch of hires. Better recruitment would of course result in hires that are better appraised than previous batches, and so on. An improving quality of new hires would result in better performing employees to fill the positions in the organization.

Employee retention is also another important aspect. Key performance indicators in this regard would consist of a weighted turnover rate. This rate could be weighted based on employee performance, with top performers being the weightiest. Lowering this turnover rate should be of high priority; any organization would want to keep its top performers within its ranks.

These are just some of the HR KPI’s that an organization manager could consider. By keeping track of these and other key performance indicators, management would be able to determine what decisions and adjustments need to be made.