E-Mall Consulting Services

Why do some managers still cling to the timesheet?

Since the start of the industrial revolution there have been three main trends in the method by which technology workers have been paid. The nineteenth century was the era of ‘piece work’ and the advent of the ‘sweatshop’. The twentieth century was the era of the Bundy Clock, Time Card and Timesheet. In the twenty first century, and the move from the industrial revolution to the information revolution, we have seen a shift to flexible work arrangements. Why then do so many managers still cling to the twentieth century concept of a timesheet?

The industrial revolution of the nineteenth century is defined primarily by the advent of machines, and the factories that produced the components of those machines. The profitability of those factories was determined largely by the rate at which they could output the components they manufactured. The owners of those companies wanted to tie their labour costs to the rate of productivity in order to maintain profit margins. Hence the advent of ‘sweatshops’ where labourers were required to work in horrendous conditions and were paid based on ‘piece work’ pay schemes. In other words, they were paid per component produced.

It’s likely that the managers of the nineteenth century realised that, while ‘piece work’ may be appropriate when picking fruit, it is intrinsically unfair in a factory where the rate of production is rarely determined by the skill or productivity of the individual worker in isolation. In spite of the unfairness of the system, change did not come about for nearly a century when business eventually came to understand that piece work results in poor quality. Factory workers are motivated to focus exclusively on the quantity of units produced rather than the quality of the product.

By the late nineteenth century there was a shift to hourly pay, and therefore a need to record the hours of work per employee. To this end, William le Grand Bundy invented the Bundy Clock, ushering in the era of the ‘time card’ or timesheet.

While a Bundy Clock and time card may work in a factory, when it comes to the field service technicians repairing machines in the field, it is entirely impractical. To overcome this, field service technicians, in order to have some consistency with the factory workers, were required to keep ‘time sheets’ in which they recorded their start and end work times. The obvious additional benefit of the timesheet is that the field technician can include a breakdown of hours worked per customer or per job, and this could also be used for billing and/or calculating contract profitability.

Traditionally the timesheet was also used to manage overtime. Any time beyond the standard eight hours was considered overtime and paid at a higher rate per hour.

In the twenty first century we are in the era of work-life balance, flexible work arrangements, and field service technicians are paid annual salaries rather than an hourly rate. On any one day a field technician may start early in order to drive to a distant customer, then finish early. He/she may work late one day and start late another day so as to attend a school function for his/her child. He/she may have a dentist appointment during the day and work back that day to make up time. None of this would have any impact on how much the technician is paid.

Regrettably, on some days there may be no be no customer jobs for a period of time, and the technician may use that time to complete a stocktake or tidy the service vehicle. Again, this will have no impact on what the individual can be paid.

A timesheet is not a useful tool for determining pay.

Worse still is when a company uses timesheets to determine billing or calculating job costs. As any good field service manager knows, a good yardstick for productivity of a field technician is whether they are achieving in excess of 80% productive time, including travel and on site time. Why then is it that some companies expect the total hours recorded on a timesheet to be equal to the number of hours worked? It’s amazing how often in these cases that seems to be true. But how is it possible for that information to be accurate. Is it helpful to be evaluating contract or project profitability based on inaccurately recorded time data? Is it appropriate (or even ethical) to bill customers based on time data that is known to be inaccurate?

A timesheet is not a useful tool for measuring productivity, profitability or for billing customers.

A far more useful tool in the era of flexible work arrangements, annual salaries and smart phones is the Utilisation Report.

Modern Field Service Management (FSM) software applications have apps that run on smart phones, allowing field technicians to capture their activities in real time, from the start of travel to their first job, to clock off from the last job or the arrival back home or at the depot at the end of their work day. In the process they will capture actual travel times, actual on site times, and actual time spent on ‘unproductive’ work or private activities. This data can all be pulled together to calculate productive time, travel versus on site time, as well as accurate job cost data.

But what of paying the employee and charging the customer for overtime?

The simple fact that a technician worked longer than their official shift on any one day does not mean it’s appropriate for them to be paid overtime. In fact, in the era of flexible work practices, it is unlikely to be the case. Overtime pay to the employee can only be managed by way of a request by the employee and approval by an authorised supervisor.

As for billing the customer, there may be many reasons why work is done outside normal shift hours by choice of the service company or technician, rather than by the customer’s choice. Again, there must be a manual decision made as to whether an overtime charge rate is applicable or not, rather than relying on timesheet data. \

FSM software, smart phones and the UTILISATION REPORT are tools of the information age. The Bundy Clock and timesheets are tools of the industrial revolution, and belong in history books along with the telex and FAX machines.

To Centralise or not to Centralise

In recent decades companies have effectively utilised new technologies in order to centralise business support processes such as Accounts Receivable, Accounts Payable, Payroll, Human Resources, IT Management and others. With the advent of new technologies for automating Field Service Management such as mobile work order applications and GPS tracking, the question gets asked by most large service organisations whether or not to centralise Field Service Management.

There is no doubt that with sophisticated scheduling and dispatch tools like the Astea Dispatch Console and Dynamic Scheduling Engine, used in conjunction with mobile work order management tools such Astea Mobile Edge, service organisations have everything they need to allow centralisation of the dispatch process. Doing so can yield significant benefits:

• Modern software applications allow automated scheduling, drag-and-drop manual scheduling, skills matching, route optimisation, on-time parts supply etc. These capabilities make it possible to efficiently schedule and dispatch more field staff using fewer dispatchers.
• Centralised dispatchers are able to achieve more optimal utilisation of field service staff. By having global visibility and centralised control, they are able to shift resources quickly from areas of light workload to supplement areas where work volumes are high.
• Through greater visibility, improved SLA compliance can be achieved without the need to increase field staff.

But are these benefits enough to warrant centralising Service Management? The answer to that can only come after a careful analysis of potential costs. In recent years some large service companies have taken the opportunities provided by modern FSM applications to centralise their service management, often to the detriment of their relationships with customers and field service staff. In some cases, after losing customers and staff, the decision has been reversed at great cost and after the damage has already been done.

The answer to this conundrum is to centralise the dispatch process without centralising the whole field service management structure. Service dispatchers take the day to day responsibility of ensuring that the field staff is well utilised and operating efficiently, SLA are being met and jobs are getting closed off and pushed into the billing process in a timely manner. Regional managers and supervisors can stay in place where their local knowledge and relationships with customers and staff are maintained, or even improved on as their days are no longer filled with scheduling challenges.

Another issue that needs to be addressed is that of management compensation plans. Often service managers are paid bonuses based on how well their teams meet SLA or how effectively utilised they are. With centralised dispatch, the local managers do not have direct control over these factors anymore, so continuing to pay bonuses on that basis is a recipe for constant staff disputes.

This is not a reason to not centralise the dispatch function. Employee comp plans are meant to provide an incentive for employees to work towards implementing the company’s strategies and achieving its goals. They should not be an impediment to the implementation of those strategies. The compensation plans need to be changed to be in line with the new strategy. Local managers and supervisors should be compensated based on factors they can control, such as customer retention, the effectiveness of staff training, the discipline of the staff under their management etc.

It’s also critical that under a centralised dispatch model, quality and timely information is provided to the local managers and supervisors to allow them to do their jobs effectively. The communication channels between the dispatchers and the local managers must be kept open so the managers can be advised of any discipline or training issues affecting their staff. They need to be provided with reports on KPI and analysis of staff utilisation, SLA compliance, first time fix rates and other important metrics that will help them identify issues in their service territory.

Centralised scheduling and dispatch, along with the software tools that enable it, are extremely effective at achieving efficiency gains and improving customer service, but it’s critical that it be implemented in such a way that it does not open a rift between your service team and your customer, and does not leave your field staff feeling isolated and unsupported. If properly managed, the exact opposite can be achieved. Customer facing managers will have more time available to attend to these critical relationships.

Technology Drives Customer Expectations