If you were to put the CEOs, financial directors and operations managers from every Fortune 500 company into a room and ask them what the biggest threat to their business was, you’d get dozens of answers. Changing customer behaviors. Market instability. The pace of technological change. But one answer would pop up time and time again.
Because while some organizations can embrace technological changes, some can weather market instability, and some are set up to move with changing customer behavior, no company can thrive if it’s not efficient.
We’ve done the research to discover just how high the costs of inefficiency are. The results are shocking.
Financial Costs: 20-30% of Revenue
That’s right. Almost a third of your business’ total revenue can be lost because of inefficient practices and processes.
That’s according to IDC research. And it breaks down to the fact that senior staff are doing jobs they shouldn't, other employees are doing jobs that don't generate revenue and old outdated processes are wasting money:
- 50% of companies spend up to $25 on each manually processed invoice
- 64% of all sales rep working hours are spent on non-revenue generating activities
- 30% of specialist IT time is spent on basic, low-level activities
These costs soon add up. As we’ll discuss, wasted employee time is the main driving factor behind inefficiency, stealing almost a third of your revenue. But you also need to remember that you’re spending good wages on experts who are handling tasks that are significantly below their pay grade.
Automating these tasks, or simplifying them, will fix this revenue leak quickly, turning wasted running costs into profit. Profit you can re-invest into scaling up your enterprise.
Time Costs: 26% of Every Employee’s Day
The fact that over a quarter of all paid-for working hours is spent on avoidable chores should come as a wake-up call to your business.
According to OnePoll, 26% of every employee’s day is wasted. That means that a quarter of the salary you pay out covers tasks that don’t need to be done:
- 42 minutes per day spent on needless administration tasks
- 28 minutes per day wasted in unnecessary meetings
- 26 minutes per day devoted to outdated technology
When you consider that 38% of global respondents said that their employers use manual administrative processes, and 48% believe that better technology would make them more productive, you start to see the real benefits of automated checklists and processes.
Recruitment Costs: $4,129 per Employee
A quarter of your employees’ time is wasted on tasks they view as needless and unnecessary. Almost half want you to invest in better technology. And 85% of employees are frustrated by their jobs (Gallup 2017). So it should come of no surprise at all that one third of the US workforce is actively looking for new opportunities.
So what? If they’re not prepared to do the work, replace them with someone who will, right?
Sure. If you want to waste even more money. According to the Society for Human Resource management, it costs $4,129 and takes 42 days to replace each team member who quits. And one third of your whole workforce is looking for a new job.
Wouldn’t it be much more cost-effective to improve your efficiency, keep your employees engaged and satisfied, and retain that talent that you need to succeed?
Improve Your Efficiency With Array
With up to 30% of revenue, 26% of billable hours and rising recruitment costs all dependent on the efficiency of your processes, your business can’t afford not to become more efficient.
Array’s simple and easy tools will help you to bring in simpler processes, cut administrative time, and make sure everyone’s working effectively and profitably for your business. Try it today for free, and see how much time and money you could save.