Posts
I cannot remember the financial bigwig who made a video talking about how every employee must generate more for the company than their salary and benefits consume.
It's expressed rather directly and that caused a YouTuber I can remember to not get it.
Tim at Timcast.
He cited that he has people working for him that don't generate any revenue; so he concludes that the bigwig must be wrong.
But...
You see, Tim, what that assistant is doing is freeing up someone else to focus on generating revenue.
If having a helper means that the revenue generator brings in more money than they and the helper consume in salary and benefits, then it's worth it and the bigwig is correct. Especially if the revenue generating employee brings in substantially more when freed of the tasks performed by the assistant.
I've always been surprised by how few companies have known burden rates, much less accurate burden rates, and task loading times to go with the burden rate(s). Usually, if they have any concept of it at all, it's a "guzinta" not a burden rate ("we spent X dollars on Y employees last year, Y guzinta X this many times so that's our burden rate". No, it ain't....) You don't have to all Frederick Taylor on Steroids to get, or use, the data but you do have to know rather precisely just how your business operates; not how you think it operates, how it actually works; an awful lot of businesses are run as Advanced Hobbies.
ReplyDeleteUse *relatively cheap* technology to handle the simple, stupid and repetitive tasks and have the *expensive* people do the value-add tasks that generates postiive ROI.
And, recognize that tomorrow will be different from today in unknown ways.
Companies work in aggregate. Some functions are necessary for which there is no direct return, but which allows other functions that do. In the medical device industry, regulatory functions do not have any immediate return, but are necessary to ensure compliance which allows a company to sell products.
ReplyDeleteI worked for an aerial fire fighting company in maintenance. We COST the company money. But, if we didn't, the flight department wouldn't have planes to fly to make money.
ReplyDeleteWhen I took over service, I created a quick guide for the techs to use. They made money for the company wrenching things, not doing paperwork. I did the quotes and submitted the bills, handed out the RMA's and stopped them from doing monthly reports. They pushed out more billable work which meant we made more profit for the company. I had to fight with the CEO every quarter because he got one report instead of 10 a month. It blew up when I said in a meeting, I be glad to submit 10 reports, if he could prove he even read the one. He couldn't.
ReplyDelete