By Yves Hiernaux, Co-founder and CEO of Beebole
One recent Oracle study found that as many as 46% of companies fail to identify shared priorities and strategic goals between HR and finance. It later found that by the end of 2024 51% of businesses globally plan to invest technology to track employee experience.
With half of the businesses worldwide planning to spend significantly on HR tools, strategic conversations between finance and HR teams will be crucial. Without them, how can businesses know what they want to get out of investments, and how will they set goal posts to stay on top of progress?
In terms of business outcomes, the chasm between HR and finance data is not so vast after all. Where people management meets money, it usually comes down to time. And until industry shifts to a new way of putting a value to work efforts, finance and HR can take advantage of time tracking tools for the insights that will help to maximise the investments they make into the people, plus the investments that people put into the company.
Smart work is happy work
Finance teams will inevitably need to account for growth goals, and adjust company spend accordingly. No matter what business sector your business operates in or the business model it has adopted, time always equals money.
Without understanding workforce capacity vs workforce yield it’s very difficult to predict how much business the company can feasibly take on. In turn, that will impact how much money the company can make, and what profits and budgets will look like in the near and distant futures.
Where HR comes into this conversation, these professionals are responsible for gathering useful insights into employees’ workloads. As such, they should be able to tell who feels overworked and to identify where gaps in skills are causing unnecessary stress for teams. Time tracking tools give HR departments an holistic view of teams’ workloads, so HR departments can work smarter to identify clusters of work that might be causing dissatisfaction.
Once these insights are available, it’s possible to remedy the issue before it turns into a complaint, or worse; losing a valuable employee whose skills bring in revenue.
Not to mention the costs associated with hiring new staff, or the extra work it creates for HR in terms of onboarding and advertising for roles, financial teams cannot accurately plan without a consistent and reliable workforce. That is why companies should be keen to restrict employee churn as much as possible.
But holding on to staff is only one part of the challenge. When you identify inefficiencies within projects and unequal workloads, this provides the supporting evidence HR managers need when it’s time to hire new staff, allowing business to grow sustainably.
Keep your eyes on the prize
Businesses only take on clients or projects to make money. So, when the work is neither profitable nor satisfying for staff it can be damaging for business to continue with those projects. Using time as a metric, HR and finance teams can both identify opportunities to retire a project for the good of the company’s bottom line.
Time tracking tools offer businesses full transparency over time-cost inefficiencies that occur on accounts and projects. With it, insights that highlight diminishing returns make the decision to deprioritise a project much easier. In the same vein, insights into underperforming projects where man power is low indicate how employee time can be reallocated more fruitfully.
When failure isn’t an option, looking at a project from a different perspective is sometimes the thing that’s missing. This was the case for KMAC (Kentucky Museum of Art and Craft), an American NGO which found that time tracking gave it greater insight into team resourcing and the true cost of its operations. As an NGO, strict adherence to budgetary requirements was often the difference between delivering on goals and shutting down. By reviewing project insights through the gaze of time, HR and finance teams can collaborate better to introduce efficiencies and be more realistic with budgets.
For example, hidden costs can happen really easily, especially if you don’t have the right tools to identify them. When individuals register expenses, it’s not immediately obvious how they occurred and whether they are billable to clients, customers, partners, etc. This creates more work for both HR and finance teams, and employees can sometimes be left out of pocket themselves.
One Cumbrian consultancy, Createc overcame this problem by incorporating expenses directly into its time tracking system. With visible data that links HR insights to finance, time tracking tools gave the company a much more accurate understanding of projects’ financial demands.
There is another paradox when it comes to client profitability; billing works both ways. Frequently billing different amounts than initially quoted can be very jarring to clients, who may take their business elsewhere if it remains consistently inconsistent. Similarly, routinely absorbing extra work internally to make up for poor calculations is not a sustainable or profitable option for your business. Furthermore, it gives financial planners a distorted view of how profitable a project or client account really is.
Smart companies, like Navteca, the technology services company based in Maryland, plan ahead using time-tracking data insights to make more accurate estimates on pricing and deadlines before the work has been done.
French automotive information company Infopro Digital used a similar strategy for its own costs, using a single service management solution to gain transparency over timetables and to monitor overtime continuously. As a result, it was able to limit additional costs occurring from last-minute overtime requests, guarantee preferred working hours for observance of religious festival Ramadan and apply stricter quality control for over 300 employees.
By analysing trends in employee time with regards to projects, customers, partnerships and account history, financial planners can more accurately acknowledge the projects that are causing people pain, eating into profits and doing overall harm to the business or its workers.
Human capital management and the competitive advantage
One of the most commonly cited issues that causes employee satisfaction is working on unfruitful projects. Too many time-drain clients or projects can become frustrating for employees who need to demonstrate professional progression through successful projects. Without clear progression routes, staff retention rates can drop harshly and become a burden to businesses.
With a greater overview of both team capacity and project profitability, this can be managed more effectively. Furthermore, HR and finance teams can help business leaders identify natural business opportunities.
As a consultancy operating across Spain and Mexico, Optare Solutions uses time tracking to maintain assigned budgets among a high profile roster of telecommunications clients, simply by adjusting staff costs based on need.
Experienced employees incur a much bigger bill for clients than an intern does. So where capacity allows, adjustments can be made to ensure that the right level of expertise is available and is not redundant on any project. Not only does this provide upwards mobility for less experienced staff by creating more opportunities for them to work on high profile projects, it also gives the company a competitive edge on price consistency without compromise to overall performance.
Looking at how employees’ time is being used effectively, or indeed inefficiently, there could be an opportunity to upskill for the benefit of the employee as well as for the company. Where staff regularly log a lot of time on a single task or a project has been ongoing for a long time, it could be time to introduce a training initiative.
Using real insights based on employee time and profitability, leadership can ensure that training and development leads to new revenue streams. With the same stroke, they will be investing in the skills of their employees, improving job satisfaction and fostering employee loyalty.
Why should HR and finance look to time for answers?
Despite the obvious differences in their job descriptions, there are areas that are beneficial for HR and finance departments to align on. Where HR considers employee time in terms of availability and professional progress, finance teams are looking at the same data when they try to quantify projected spend and profits.
By using timesheet insights, HR and finance teams can find a new language that helps them both communicate better with the C-suite about the direction of the company and its employees. These insights will help to identify new business opportunities that can be progressed by sales, operations and other important departments. Meanwhile, HR and finance teams can enjoy more manageable workloads with reduced employee churn and more accurate, reliable budgets the first time around.