U.S. Businesses Waste $687 Billion Annually on Unnecessary Admin Work, New Kronos Study Finds

CHELMSFORD, Mass.--(BUSINESS WIRE)--A new global study from The Workforce Institute at Kronos Incorporated and Coleman Parkes Research found that U.S. businesses waste $687 billion per year on unnecessary administrative work, significantly more than any other country. That equates to an estimated cost of $4,554 per employee, per organization on burdensome tasks that are not directly related to employees’ core job roles.¹

The study, “The $687 Billion Question,” also found that the U.S. workforce is hindered by complexity, low productivity, and poor-performing technology. The research was conducted by The Workforce Institute at Kronos and Coleman Parkes Research, and included a survey as well as extensive interviews with HR professionals, operations/line of business managers, and employees.

News Facts
Treating employees as an asset rather than a commodity is essential for true workforce engagement. It’s a critical factor in attracting and retaining the best talent possible in a competitive job market. However, manual administrative tasks unrelated to employees’ core job roles creates a time-consuming burden can lead to disengagement. Instead, organizations should re-evaluate these processes to empower employees to deliver their best as part of a broader engagement strategy.

• Bridging the engagement gap: Technology can be turned into an advantage, but out-of-date solutions will only add more unnecessary complexity.
  • Manual processes are burdensome, with 78 percent of respondents citing this as a cause of lost productivity.
  • Nearly three-quarters (72 percent) of operations/line of business managers report that outdated systems/technology are the biggest workforce management challenge.
  • Up-to-date technology would improve employee engagement, according to 72 percent of all respondents.
• Productivity and employee engagement should go hand-in-hand: Employees see themselves as contributors, not liabilities on a balance street.
  • Shockingly, only 12 percent of all respondents surveyed rate employee engagement as very strong within their organization.
  • Some organizations may feel as though there is a leadership void, as nearly three out of five respondents (59 percent) believe that the CEO is focused on finances rather than employees.
  • Only 31 percent of HR professionals surveyed rated their people among the top three assets of their organization, despite national discussion about the importance of employee engagement.
• Stuck in the middle: People are torn between meeting customer needs and manager expectations.
  • Sixty-five percent of respondents find it difficult to complete all of their tasks in a typical work day (which mirrors a 2016 Workforce Institute survey on overtime.) In fact, 48 percent of operations/line of business managers, 47 percent of HR professionals, and 38 percent of employees say their working life is too complicated.
  • Management demands, internal politics, unrealistic workloads, lack of staff availability, and poor technology support create a perfect storm of complexity that detracts from providing high levels of customer service, according to respondents.
  • Respondents believe reducing administration and paperwork, providing the right technology to automate tasks, and improving structure/support within and among departments would allow them to more time to think and plan, address high priority tasks, and focus on customers.
• Small changes create big rewards: Reducing just one hour of wasted time per employee adds up to billions of dollars.
  • By reducing the burden of admin work by one hour per week, U.S. organizations would save $1,518 per employee, for a total of $229 billion annually.
  • According to the study, respondents average 3.1 hours per week on administrative tasks unrelated to their core job roles.
  • Just 15 percent of all respondents say employee productivity is very strong within their organization.
• Employee motivations are evolving: Monetary rewards are no longer the sole motivator for employees, which is why organizations should focus on communication, collaboration, and culture to keep employees engaged.
  • Communication continues to be a barrier, as nearly three out of every four respondents (73 percent) said better communication with management will help them feel more engaged.
  • When it comes to reasons to leave their job, compensation is seventh on the list, with respondents stating they are more likely to resign due to lack of direction, lack of focus, not seeing their future role in the company, not feeling valued, not feeling understood, and not getting along with their manager.
  • By reducing the unnecessary administrative burden that managers are also facing, managers will be able to dedicate more time to communicating the organization’s vision, collaborating more closely with team members, and fostering a high-performing work environment.
  • Still, 58 percent admitted that rewards and incentives would likely increase productivity.
• A global economy, a global issue: The U.S. isn’t the only country where organizations are losing tens of billions of dollars per year due to lost productivity. This global study found that lost productivity is costing organizations around the world a combined $1.6 trillion (USD):
  • China: $522 billion;
  • Germany: $144.6 billion;
  • France: $79 billion;
  • United Kingdom: $78 billion;
  • Australia and New Zealand: $35 billion;
  • Netherlands: $34 billion;
  • Belgium: $16.5 billion; and
  • Mexico: $2.2 billion.

Supporting Quotes

• Joyce Maroney, director, The Workforce Institute at Kronos
  “It’s clear that a small thing, such as a single hour wasted, can make a huge difference when multiplied across hundreds or thousands of employees. At the same time, this research shows that the average day is also becoming increasingly complicated for employees, with a large proportion of time being spent managing complexity instead of adding value. This is not how employees want to spend their days. As a society, we’ve reached an important junction where workforce demographics, working patterns, and employee expectations are changing. Treating people as an asset rather than a commodity is essential to achieving true workforce engagement, which will only further support efforts to attract and retain top talent. Organizations can increase the likelihood of meeting today’s challenges through strategic deployment of technology, a clear HR strategy, an appreciation of cultural change, and a focus on employee engagement.”

• Ian Parkes, director, Coleman Parkes Research
  “Engagement happens from the top down and from the bottom up. Employees need to feel valued to go the extra mile and provide discretionary input, and managers must lead by example to create a culture of communication and collaboration. However, this just isn’t possible in many organizations as both employees and managers are faced with increasingly complicated workdays. Technology is essential, but if it is outdated, poorly implemented, or lacks a purpose, it will only add to the complexity. Instead, organizations should focus on technology investments that help everyone focus on, and streamline their core job duties and add value to the company. The burden of unnecessary admin work is costing U.S. organizations a staggering $687 billion per year. Mitigating this brain drain for both employees and managers will help organizations achieve significant savings while at the same time fostering higher levels of employee engagement that further aid efforts to attract and retain the best workforce possible.”

Supporting Resources

• Register to learn more about “The $687 Billion Question” during a webinar with The Workforce Institute at Kronos Incorporated and Coleman Parkes Research on Oct. 25 at 2:00 p.m. ET.
• Download the full report and infographic.
• Learn about the Kronos WorkInspired culture and how it benefits customers.
• Connect with Kronos via Facebook, Twitter, Google+, LinkedIn, and YouTube.

About The Workforce Institute at Kronos
The Workforce Institute provides research and education on critical workplace issues facing organizations around the globe. By bringing together thought leaders, The Workforce Institute is uniquely positioned to empower organizations with the knowledge and information they need to manage their workforce effectively and provide a voice for employees on important workplace issues. A hallmark of The Workforce Institute's research is balancing the needs and desires of diverse employee populations with the needs of organizations. For additional information, visit www.workforceinstitute.org.

About Kronos Incorporated
Kronos is a leading provider of workforce management and human capital management cloud solutions. Kronos industry-centric workforce applications are purpose-built for businesses, healthcare providers, educational institutions, and government agencies of all sizes. Tens of thousands of organizations – including half of the Fortune 1000^® – and more than 40 million people in over 100 countries use Kronos every day. Visit www.kronos.com. Kronos: Workforce Innovation That Works^™.

About Coleman Parkes Research
Coleman Parkes Research works interactively with clients to formulate proven strategies to generate market insight based on individual requirements and key hypotheses. From undertaking thought-leadership research for marketing campaigns and analyzing win-loss opportunities to testing product messages and conducting senior executive interview, our in-house team of experts ensures that all clients’ research projects are designed and structured to not only gather the right data, but also to generate valuable insights that question the “so what” and drive effective business growth.

Study Methodology
The Workforce Institute at Kronos commissioned Coleman Parkes Research to investigate the current level of employee engagement in a cross-section of U.S. companies and the impact engagement can have on business success. In 2016, Coleman Parkes conducted 314 online surveys and detailed interviews with HR professionals (105), Operations/Line of Business managers (105) and employees (104) at companies with more than 600 employees in the Retail (21 percent), Healthcare (20 percent), Public Sector (20 percent), Manufacturing (19 percent), Service (16 percent), and Transportation and Logistics (4 percent) verticals. The sample sizes and eventual data set provide a snapshot of views that we believe is representative of midsize to large U.S. organizations as a whole. A similar approach was used for each country included in the study.

Footnote 1: Dollar amount calculations based on 2016 U.S. Bureau of Labor Statistics reports on hourly wages and employed persons. The complete methodology is contained in the full report, available here.

© 2016 Kronos Incorporated. All rights reserved. Kronos and the Kronos logo are registered trademarks and Workforce Innovation That Works is a trademark of Kronos Incorporated or a related company. See a complete list of Kronos trademarks. All other trademarks, if any, are property of their respective owners.