VCS Blog

28 March 2016

4 Intangibles That Drain Company Profits

Posted by VCS Software
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Opinions vary greatly on the benefits that HR resources bring to a company’s bottom line. Today’s competitive landscape demands definitive proof that HR contributes a measurable value to organizational growth and profitability.

Despite best efforts to meticulously calculate expenses and budgetary needs, there will always be intangibles that come into play. The hidden costs associated with labor practices, productivity, and time managements all correlate directly back to the human variable. What behaviors, habits, and company processes are secretly draining your forecasted sales?

As you read this post, consider what costs require additional scrutiny and examination.

Lost Productivity: Employees With The Wrong Skill Sets

Hiring is a delicate art and one that can negatively impact an organization should the candidate not live up to the expectations and job requirements set. A hiring gone wrong can be costly to the bottom line resulting in lost productivity and potential issues with product and service level quality. When planning hiring initiatives, an organization needs to carefully weigh job requirements with a fit to the organizational culture within. By executing hiring strategies that align to your business goals, one can be sure to attract the right skill set of future employees.

Total Cost Of Partial Absences, Planned Absences, and Unplanned Absences

Absenteeism has a palpable effect on the bottom line of corporations today yet few HR administrators fully comprehend the magnitude of this issue. There are considerable direct and indirect costs incurred from absenteeism. Managers should not be motivated to diminish absenteeism simply because of excess cost, but without the proper tracking tools, employers cannot sufficiently estimate their accrued liabilities. Since an accurate portrayal of accrued paid time off (PTO) is necessary, financial managers must be proactive in understanding the true value of and how it affects the bottom line.

Incentive Programs That Fail To Motivate

It's reasonable to assume that reward incentives result in a high performing employee. Yet, a litany of scientific evidence indicates otherwise. Research from top psychologists contends that rewards and incentive programs merely produce temporary changes in behavior and performance. An employee’s behavior may exhibit positive change in the short term, but more often than not, the change is merely temporary. (We see similar trends to the psychology behind failed diets). According to an article by the Harvard Business Review, incentives such as vacations, giveaways, and monetary rewards rarely succeed in changing an employee’s attitude for the long term. (Source).

FMLA Abuse

In recent years, employees have become more nuanced in their manipulation of the Family and Medical Leave Act (FMLA). An increase has been reported in the use of intermittent leave when vacation and sick leave options have been exhausted. Employers must be proactive in detecting such abuse to minimize disruption in the workplace and to minimize profit loss. Failure to hold employees accountable for the proper use of time can be detrimental to a company’s bottom line. Organizations today must institute clearly defined policies as they relate to the usage of PTO time. An understanding of the provisions of the FMLA Act is essential for its proper management. For information on FMLA policy and procedures, access theFMLA Act here.


VCS Software | Scheduling Software Systems

Traditional time & attendance systems - which are still widely in use today– clock the hours that employees are on the job after they have worked as the hours are counted after the shift has taken place. This reactive approach breeds overspending and inefficiencies for most organizations. VCS’ software systems compute data prior to shift work, so that planned hours and staffing are properly configured. Proactive scheduling promotes a productive, compliant, and fiscally responsible workforce. For additional information on VCS products and services, visit www.vcssoftware .com or contact us at 888-864-4144.

Learn how to combat against numerous hidden costs often related to labor practices, productivity, and time management.