The most important asset in any business is the people however not many organisations understand the productivity impacts that are occurring in their business every day. Financial approaches to productivity and employee value often focus solely on the actual outgoings such as wages and salaries or accrued leave balances. This can often paint a very narrow view of the return attributed to the individuals that make the machine work.
Holistic Approach
At Crucial Analytics we take a holistic approach to people risk – especially how this impacts an organisations financial position. Employee turnover, absence, incidents and illness all impact on the productive output of an organisation. If these are not understood and controlled there is a risk in the business which has a productive impact. These flow straight to the bottom line.
There are a number of examples – a company whose employee turnover is higher than a competitor will high recruitment costs, high absence and poor employee engagement. This impacts on client delivery and ultimately profitability.
What’s it Worth?
Controls and processes designed in the industrial age still drive the way employees are managed and how productivity is understood.
Silo’s and fragmentation within areas means that there is no cohesion in the drive to improve productivity.
Engagement
Poor employee engagement has a large number of financial impacts from stock loss through to customer service. Understanding the financial links and controls should be at the top of the list for every organisation especially when focusing on client retention and sustainable results.
Recruitment and Training
Human resources needs to work hand in hand with safety and workers’ compensation. The business needs to be asking are we recruiting the right people for the job and do they have the right characteristics for the role? The financial consequences of getting this wrong can be catastrophic.
Employee Turnover
Employee turnover can impact engagement levels and the flow on delivery to customers which in turn impacts financially. We all like dealing with the same account manager or customer service representative, so what are the costs of high turnover and what is acceptable?
Safety
A decision made by procurement can and often does happen in isolation of safety yet understanding the flow on effect to incidents and workers’ compensation costs can save money. An understanding of safety and the associated costs should be integral to the operations of all organisations. The financial impact can be very severe and long lasting.
Workers’ Compensation
Workers’ compensation is both a compulsory cost by law and one which has a significant financial cost attached. In some organisations it can run to the tune of hundreds of millions. Given that it is compulsory a lot of organisations believe that they have no control over it. This could not be further from the truth. There are multiple financing options and also multiple ways to influence the outcome. Simple measures like integrating safety and workers’ compensation can have large financial benefits.
Absence - Planned and Unplanned
Unmonitored, inconsistent or poorly understood absence policies and management has direct flow on effects to engagement and productivity. Do you get annoyed at a fellow employee having a Monday or Friday off? Does your manager play favourites or not report unplanned absences? These are two examples which have large financial consequences not just in terms of lost productivity but also disengagement of all other employees.
Each of these are simple examples where there is a significant risk to an organisation with an equally significant cost.
At Crucial Analytics we can take your data and value the lost productivity and profitability. With sophisticated machine learning and predictive analytics tools, we can then highlight the key drivers and design solutions that will release untapped potential in your business.
How can Crucial Analytics help you?
- Providing an assessment of the current position of your people risk areas
- Determining your lost productivity cost and how this can be improved
- Integrating people risk focused financial metrics that improve your business performance
- Creating allocation models and cash flow projections for workers’ compensation purposes
- Linking engagement to your core business to highlight key areas for sustainable financial improvement
