3 Easy Ways To Find Soft Cost Savings In Your Organization
If you’re like most of us, you’ve gone through at least one season in life where you packed on a few extra pounds without noticing.
One day you step on the scale and there’s an extra 15 pounds showing up.
You think back and realize you’ve been eating an entire party sized bag of chips every week with the occasional sleeve of oreos for the last two months.
You cut out the chips and cookies from your daily diet, maybe exercise for a few weeks and you’re back to normal.
It’s a simple fix, but it crept up on you for who-knows-how-long because you weren’t constantly paying attention to it until it was blatantly staring back at you in the mirror.
That’s the problem with a lot of soft costs. They creep into your operations unnoticed and weigh down the company’s performance and productivity across the board.
How can you find the soft costs that are costing your organization time and money before it’s too late?
Better Project Tracking
Most companies that aren’t charging by the hour don’t think about the need for time tracking, and that’s a big mistake. You can’t manage what you don’t measure, and you can’t improve what you can’t manage.
A major issue that people often have without realizing it is their inability to estimate time. How many “it just takes like 5 minutes” type of things are people doing?
We already discussed the high cost of task switching even if 5 minutes were accurate. However, most of the time we relate ease with shorter time periods. A task may actually take 20 minutes, but because it’s something simple or easy, we perceive it to be a quick task.
There’s even more of a difference between estimated time and actual time when the projects are larger. Whether too high or too low, you need to rein in and get precise on how long different tasks and projects actually take.
This can easily be done with time management software, or if you have labor allocation in your HCM software. It can get tricky though if this is not already a part of your company culture and employees could think this is a sneaky way that you are trying to spy on them.
The sooner you can get project time tracking integrated into the workflow, the sooner you’ll be able to get a better grasp on how and where time is spent to more accurately plan out future projects and spot potential time sucks in processes.
Document The Entire Project Process
Meetings. Reading Emails. Writing emails. Phone calls. “Pop ins.” Reviewing work.
All of these things take up valuable time, but usually aren’t accounted for when planning a project or even when reviewing a completed project.
This project management time is a major opportunity to clean up your soft costs.
If a task took four hours to work on directly, but two hours of meetings, a few “quick” phone conversations, and of course reviewing work, it didn’t really take two hours. It took six hours plus phone calls and review time. And what if there were four people in those two hours of cumulative meetings?
That’s actually eight hours.
So now a project that was thought to be four hours actually cost the company over 12 hours of employee time. And if an executive was in some of those meetings and review, then that time is even more valuable.
By documenting your full project process, you’ll get a better idea of what’s happening and you’ll also find areas for improved efficiency. Are all of those meetings necessary? Can the same output of those meetings happen with less people and in less time?
People may use the “pop in” as a time killer or procrastination tactic (intentionally or unintentionally) because they feel “busy” even though they’re not being productive. When they start becoming more self aware of this time poorly spent, they can chop down a lot of time and get more focused.
For example, it’s not uncommon to have ten pop ins throughout a work week between friendly employees that are ten minutes each. Multiply that by the two people involved and that’s 200 minutes spent “chit chatting” about a project. When you see that on paper, you realize that you can probably cut it down to two 15 minute stand-up meetings instead. That’s a 70% time saving on the project.
These are all simple fixes, but without the self awareness, you wouldn’t even know to think about cutting down on things like meeting time, frequency, or attendees.
Get Suggestions From Your Frontline Employees
Who knows the work better than the actual people doing the work?
Your employees are the ones in the trenches and can help shed more light on saving soft costs than just reviewing things at a higher level with your leadership and managers.
Get feedback from your frontline workers on areas that get them frustrated or feeling some lack of performance potential. What do they feel is slowing them down? What ideas do they have that could make things faster and easier?
Have a quick standing ten minute check in every week, or every other week to ask your employees where they’re feeling stuck or what they think could be improved to help them do their job better. Don’t wait too long between these check ins because you don’t want the “little things” that feel like they aren’t a big deal to stack up and easily get forgotten. The purpose of the quick check in is to find those easy fixes that don’t think about.
Once you put these ideas on your team’s radar, you’ll all soon start finding more and more opportunities hiding in plain sight. It’s also a chance to create more employee engagement that will help them feel more connected to the company’s mission.
You’ll also have happier employees by giving them a greater sense of purpose, and stronger impact on the organization by helping improve the way the company operates.
Dive Deeper With Your Free CFO Guide To HCM
Want to take a more strategic approach to managing your workforce? This guide will give you what you need to for better collaboration with HR, attracting and retaining talent, and identifying soft costs, and of course several other key topics for CFOs.
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