Why You Should Bring Back Timesheets

Westpac recently announced the return of timesheets for its employees earning up to $140,000 a year. This move sparked a lot of conversation and serves as a timely reminder of why time tracking is crucial for businesses. Timesheets aren’t just about ensuring people get paid properly; they’re about understanding productivity, enhancing efficiency, and ultimately driving profitability.

If you’re struggling with a lack of employee productivity, finding it difficult to set realistic goals, or can’t pinpoint where time is being wasted, understanding how your team spends their time is crucial.

This blog post explores why timesheets matter, how to overcome resistance to them, and practical steps you can take to improve productivity levels in your own business.

IN THIS ARTICLE

→ What is time tracking?
→ Which industries should use timesheets?
→ Why does using time tracking software or tools matter?
→ Which industries should use timesheets?
→ Setting KPIs for successful time tracking 
→ Opportunity cost: The real cost of wasted time
→ Real-life example: How effective time tracking transformed this 6-person business
→ Step-by-step guide: How to implement timesheets in your business
→ “What if my team pushes back on timesheets?”
→ What does it mean if someone resists completing a timesheet?
→ Conclusion
→ Final takeaway

Bringing Back Timesheets: Your Secret Weapon for Business Productivity

What is time tracking?

Time tracking involves recording how much time employees spend on different tasks, projects, or clients within a company. This information ensures clients are billed accurately and employees are paid correctly.

Timesheets are a tool used to track time over a fixed period. These can be manual, such as on paper or spreadsheets, or automatic, such as time tracking software or apps.

Why does using time tracking software or tools matter?

Timesheets are more than just a way to monitor your team. They provide valuable insights into how time is spent and where improvements can be made. For example:

• Efficiency insights: Knowing how time is spent can highlight inefficiencies and areas for improvement.
• More accountability: Employees are more likely to stay focused when their time is monitored.
• Better time management: Timesheets also help your team stay focused and prioritise important tasks, making better use of their time.
• Better resource allocation: Time tracking assists in planning and allocating resources by identifying which departments or areas need more attention.
• Data-driven decisions: With a clear picture of how time is allocated across different projects and tasks, timesheets help you make smarter, more informed decisions about project timelines, workforce needs, and process improvements. Plus, with accurate time tracking data, you can identify trends, forecast future needs, and make adjustments that optimise overall performance and productivity.

Which industries should use timesheets?

Time tracking isn’t just for office workers or white-collar jobs. Implementing timesheets is equally important in factories and warehouses. For example, monitoring the time spent on production lines, inventory management and logistics can help businesses pinpoint bottlenecks, streamline operations and improve overall efficiency.

In construction and engineering, where multiple tasks need to be coordinated simultaneously, timesheets are vital for resource planning, project management, and ensuring projects stay on schedule and within budget.

Setting KPIs for successful time tracking 

To measure time tracking, aim for benchmarks that reflect efficient task completion times, minimal downtime, and high levels of productivity. Key performance indicators (KPIs) may include average task completion time, percentage of productive hours, and cost savings from improved efficiency.

Understanding the Opportunity Cost of Wasted Time

Every business owner knows that time is money. But how many truly understand the cost of lost time? 

What is opportunity cost?

Opportunity cost refers to the potential benefits that a business misses out on when choosing one alternative over another. In terms of time management, the opportunity cost is the revenue or productivity lost when employees spend time on non-essential tasks instead of high-value activities.

How does opportunity cost relate to time tracking?

Consider a scenario where your team spends an extra 20 minutes every morning getting settled before starting their actual work. Over the course of a week, this adds up to 100 minutes per employee. For a team of ten, that’s over 16 hours of lost productivity each week! Multiply that by the number of weeks in a year, and the lost opportunity becomes significant.

To illustrate the real-world impact, here’s an example from one business we worked with.

How effective time tracking transformed this 6-person business

We once worked with a financial planning business run by a guy named Jeff. One day Jeff said, “Do you know what bugs me? I employ my team to work from 8:30am to 5:00pm, with a break in the middle. They rock up at 8:30, get a coffee, chat, and set themselves up. But by the time they’re actually working, it’s like 8:50, close to 9 o’clock.”

Jeff noticed that his employees were taking too long to settle into their workday. “Conveniently, when it’s the end of the day at 5 o’clock, suddenly everything becomes very quiet and people disappear to the bathroom,” he added. This routine was causing a significant loss of productive time. When you magnify these small delays across the entire team over the course of a week, a month, or even a year, the cost of lost time becomes substantial.

After doing the calculations, we discovered that the cost of lost time in Jeff’s business equated to more than one person’s wages for an entire year. And it wasn’t a massive enterprise – a business with just six employees.

So, we decided to implement a timesheet system. The idea was to track every minute of the workday, so we could see exactly where time was being spent and identify areas for improvement.

Initially, there was some resistance from the team. They saw it as an extra job to be done on top of their ‘real’ workload. But we explained the goal was to gather data to improve the business, not to micromanage or penalise anyone.

After a few weeks of tracking, the data revealed some eye-opening insights. We found that the lost time per week, when multiplied over a year, was costing the business tens of thousands of dollars. In fact, the loss was equivalent to more than one person’s annual salary. In essence, the business was losing the productivity of an entire employee because of these small, seemingly insignificant delays.

So Jeff’s frustration wasn’t misplaced. His team wasn’t being as productive as they could be, and it was tangibly impacting his business’s bottom line.

To address this, we introduced benchmarks for how long tasks should take. This prevented employees from overstating the time spent on certain activities and provided a standard for comparison. It’s that old adage, what gets measured gets managed.

We also implemented an incentive program to motivate his team. If they collectively improved productivity, they could share in the additional revenue generated.

With these systems in place, the team became more conscious of how they were spending their time and worked more efficiently. The business saw a significant improvement in productivity without having to hire additional staff.

The moral of the story is that understanding how people invest their time and ensuring it’s spent on the most valuable activities can transform a business. Jeff’s experience showed that a simple timesheet system could lead to substantial improvements in productivity and profitability.

How to Implement Timesheets in Your Business: A Step-by-Step Guide

Step 1: Pick Your Tool

First, choose a timesheet tool that works for your team. This could be as simple as an Excel sheet, or a more sophisticated time tracking software. The key is to ensure it’s easy to use and accessible for everyone.

Step 2: Talk to Your Team

Introduce the concept of timesheets to your team. Explain why it’s important and how it benefits everyone, not just the management. Address any concerns they might have and make it clear that the goal is to improve overall efficiency, not to micromanage.

Step 3: Set Clear Guidelines

Create clear guidelines on how to fill out timesheets. Your team should know:

• When to start and stop tracking their time
• How to categorise their tasks
• The level of detail required (yes, even breaks should be noted as “admin” time)

Step 4: Benchmark Tasks

Establish benchmarks for how long typical tasks should take. This helps prevent employees from overstating the time spent on certain activities and provides a standard for comparison.

Step 5: Motivate with Incentives

Link performance to rewards. For instance, if your team collectively improves productivity, they could share in the extra revenue. This gives everyone a stake in working efficiently and makes the whole process more rewarding.

Step 6: Review Regularly

Regularly review the timesheet data to spot patterns and identify areas for improvement. Use this information to make informed decisions about task allocation, workflow adjustments, and training needs.

Step 7: Be Flexible

Stay open to feedback and be ready to tweak the process as needed. Continuous improvement is key to making timesheets work for you and your team.

Overcoming Timesheet Resistance

“What if my team pushes back on timesheets?”

It’s true, employees often resist timesheets, viewing them as a burden on top of their “real” work, or as an invasion of privacy. Reinforce that the goal is to boost efficiency to improve the business as a whole, not to penalise any individual.

If your employees continue to resist the idea of timesheets, here’s how to address these concerns:

• Explain the benefits clearly: Make sure your team understands the bigger picture and how timesheets can help improve the business.
• Keep the process simple: The easier it is to fill out timesheets, the more likely employees will comply.
• Provide support and training: Offer assistance and training to ensure everyone is comfortable with the new system.

What does it mean if someone resists completing a timesheet?

Pushback can actually highlight deeper issues about fit or efficiency. If someone aggressively pushes back on time tracking or monitoring – which we have seen – it might indicate deeper issues, like being a poor fit, or attempts to hide inefficient work practices.

But if someone is a standard performing employee trying to do the best they can, it’s highly unlikely anything adverse will come from it.

Conclusion

Every business can benefit from time tracking, not just to monitor how employees spend their time but to gather valuable insights that impact your bottom line. The power of timesheets lies in their ability to help identify inefficiencies and transform wasted time into productive hours, leading to significant improvements in output and overall business success.

So, why not give it a try? Encourage your team to track their time for a few weeks and gather a sample set of data. Use this information to implement strategies that drive efficiency and delegate tasks appropriately. Your team might not initially enjoy the idea, but the long-term benefits are undeniable.

FINAL TAKEAWAY

Remember, the real cost here isn’t just about wasted hours; it’s about the opportunity cost.

Every minute an employee spends on non-essential tasks is a minute they could have spent on high-value activities that drive your business forward. Imagine the cumulative effect over a month or a year; it’s substantial.

Not having timesheets means you might be unknowingly sacrificing growth and profitability, simply because you lack the data to make informed decisions. By not tracking time, you’re losing more than just money — you’re missing out on the potential your team has to significantly enhance your business’s success.

Think of it this way: by making sure everyone is focused on the right tasks and not wasting time on less important activities, you can get more done with the same resources.

In other words, effective time management can lead to massive improvements in business performance – without increasing costs.  

To take it one step further, if you can also streamline processes and cut out unnecessary steps, imagine what that would do to your productivity. You could achieve better results without having to hire more staff or invest in expensive new systems.

In essence, effective time management is like finding hidden efficiencies within your current setup.

BY THE WAY...

Do you want to increase your team’s productivity or understand where your business can improve, but don’t know where to start? At CFO Dynamics, we work with business owners and finance team leaders to uncover hidden opportunities that drive business performance and growth.

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