What is 5 minutes a day worth at your private club?
Posted on Wed, Aug 26, 2009 @ 03:11 PM
Saving "time" at your club...
What is the single biggest expense item in your club's budget? If you are like most clubs, your answer is labor and related expenses. For an average club, payroll, taxes and benefits combines to be 53% of total expenses. So, if your club is looking for ways to reduce expenses (and what club aren't these days), labor control is the first place you should look for savings.
Remember, reductions in labor expense are "cash" savings, not "efficiency" savings. In many cases, there are tens of thousands of dollars to be found by implementing simple labor controls. Ironically, many times a club will spend more time analyzing office supplies expense or phone bills than they do finding ways to control labor expense.
Where does the "time" go?
Labor waste is most often identified in one of three areas - time theft, unnecessary overtime and scheduling issues.
Time theft occurs anytime an employee is paid for time they did not actually work. For example, an early riser shows up early at golf course maintenance and clocks a few of his buddies in before they arrive. Or the "last man out" after a club event clocks out the rest of the crew. In either case, the club is paying for labor that it did not receive.
Overtime is not inherently evil. It cousin, unnecessary overtime is however. Overtime is a strong strategic tool that can be used to effectively manage the peaks of business without over staffing for the valleys. When overtime is unplanned however, it is a very expensive problem.
Scheduling issues include clocking in early, clocking out late and getting paid for unearned time off. For most positions within the club, it makes sense to restrict employees' ability to clock-in early or clock-out late. Additionally, having solid controls in place for confirming leave requests and ensuring earned time is available can be help your club stay on budget.
What is the solution?
Implementing a labor management system addresses all of the above issues and is a very simple and affordable process. Bio-metric time clocks, online scheduling and leave requests and automatic notification of employees approaching overtime are just a few of the tools available to make it easy for your club to enforce its time and attendance policies.
Show me the money!
The impact of implementing solid labor controls can be enormous. Consider an example of a club that has 150 employees and sets a goal to save five minutes per employee per day. For the sake of simplicity, we will assume each employee is full time, works 250 days per year and costs the club an average wage of $12/hour.
- 150 employees x 250 days per year = 37,500 days
- Save 5 minutes per day = 187,500 minutes or 3,125 hours
- 3,125 hours at $12/hour = $37,500 per year
Why not plug your numbers in and play around with what your savings might be if you can pick up just five minutes per day per employee. Now take a look at your overtime expense for the year and determine estimate how much is "smart overtime" and how much is "unnecessary overtime".
As you can see, the numbers add up quick. The conclusion is most clubs can accomplish major reductions in labor expense with little or no impact on service levels.