5 Simple Profitability Opportunities CFOs Can Find In Soft Costs
So you feel like you have a good handle on the expenses across your organization?
Employees are submitting expense reports on time. Everything looks in order and within your set budgets. You trust your employees and they are following the reporting process so it’s all good, right?
Not so fast…
While it’s not the employee reporting that’s an issue, it’s actually the strategy of the reporting. You’re tracking hard cost expenses accurately, but what about the soft costs that are racking up and leaking money out of the company?
The good news is that soft costs can be a goldmine for increasing your profitability pretty quickly.
Although it’s hard to measure every single soft cost that comes up during the day, week, and year, there are ways to cut down on some of these types of expenses.
Support Call Burnout
When your employees hit a glitch or have a problem with software, who are they calling?
Is it an 800 number where every time they call they need to introduce themselves, give a background on your company and what they’re trying to do, then probably get transferred between departments a couple of times?
Then after 48 minutes they finally get an answer that should have taken 3 minutes? Not to mention the slight headache and frustration it gives the employee which slows them down for the rest of the day.
That’s the problem with software companies who don’t have a single point of contact for your organization.
When evaluating companies, be sure to inquire about their approach to customer support. Seek out those with a single point of contact, the gold standard.
Unpractical Office Design
Take a look at your office. Is it practical in the way it’s set up? Do all the departments have what they need readily available to them? Or do they need to walk down the hall, in the elevator, and around the corner just to print something out?
How about the colors of the walls? Think that sounds silly? Think again…
Different colors encourage different feelings. Shades of blue can be calming, yellows stimulate, reds can motivate, and greens can soothe.
Are the employee workstations setup for maximum effectiveness? Today’s popular trend for workspaces is having a standing adjustable desk. How about dual monitors? Maybe you could use taller cubicles for more privacy and focused deep work periods, or a more open space if your team spends a lot of time collaborating on work together.
Make sure that your office isn’t just keeping the furniture wherever the delivery guys put it, but that you put some thought into how your employees will work best.
Unproductive Work Habits And Routines
Inefficient working habits and routines could really be taking a toll on your team’s effectiveness.
Whether it’s small things like getting faster computer skills or bigger things like deep work periods and creating a culture of getting things done, you want to make sure that your employees are in the best position to do their jobs efficiently.
It’s a good idea to have your employees go through ongoing professional development training with the software that they use regularly so that they don’t get hung up on using the tools and can focus on achieving their goals. With online training sites like Skillshare, Udemy, and Lynda.com, they can access classes anytime, anywhere, for a very low cost to the company.
And once they have the modern skills and knowledge to work more efficiently, it’s important that they get significant time blocks to focus and work productively on their tasks. Are you scheduling too many meetings that keep disrupting their workflow? Is it common in your organization’s culture for people to be walking around interrupting each other for “quick” updates or check ins?
There’s a major cost associated with task-switching and it’s not one that you want your company incurring regularly.
Software Siloes And Manual Data Migrations
How many different pieces of software do your HR people have to use to get a single job done?
And they’re probably moving data between all that different software manually instead of having one main hub that speaks to everything.
Between the siloed setup and the manual work, you are wasting a huge percentage of an employee’s work week. Not to mention the fact that your employees are smarter than that and could be producing much more valuable work for the company if they weren’t drowning in these type of admin tasks just to get their job done.
Talk to your team and find areas of siloed information and manual work in your HR workflow that can be consolidated and automated by switching to a more efficient solution. Not only will you be saving money by reducing all that time spent, you’ll be increasing productivity by freeing up your employees for more impactful work.
That’s a huge profitability swing opportunity!
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.