Press Release
Dutch service providers let millions in turnover pass them by In the professional services industry, almost 10 percent of the working week is never actually charged to clients. On an annual basis, this leads to turnover losses amounting to tens of millions of Euros. The foremost reason for this is the inaccurate and irregular registration of hours, particularly on projects. A second reason is that 40 percent of employees often work longer on projects that the company can charge for, resulting in their working unpaid overtime. These are the findings of research commissioned by project software supplier Maconomy, carried out by Blauw Research among more than 200 consultants in marketing communications, ICT consultancy, business consultancy and engineering.
Accurate registration of hours To accurately charge for the hours worked for clients or on projects, almost all companies in the service industry depend on employees registering their hours correctly. Experience teaches that if hours are to be recorded correctly and accurately, employees need to register them after each activity. This research shows however that almost half of all those recording their hours (44 percent), register them only once a week or less. Only 2 percent of those surveyed register their hours following each activity. A possible reason for this is that recording of hours is seen by more than half of the respondents as a necessary evil.
Almost two-thirds (63 percent) find it difficult to ascribe activities to specific projects or customers, resulting in inaccurate record-keeping.
Sometimes, too, professionals consciously choose to register fewer hours. Marketing employees in particular are afraid of losing contracts to the competition by pricing themselves out of the market if they register all their hours.
Support from the organization A good 40 percent of consultants claim that they need clearer instructions from the organization for the registration of hours. In almost three-quarters of the organizations, the employees are encouraged to record their hours, but in less than half of the organizations are checks in place to see if employees have actually done so. This lack of clarity and absence of feedback means that inaccuracy in the registration of hours persists.
Peter van Haasteren, Maconomy Benelux’s General Manager: “This research demonstrates that the Dutch service indsustry is not underperforming in terms of sales alone, but also in having no accurate insight into business processes and the hours actually being worked. More than 60 percent of the consultants questioned work in ICT, where budgets agreed in advance are the rule. In this sector, people are more reluctant to record their hours, depending on the degree to which doing so would jeopardize the profit margin. What in fact happens however is that losses are made invisible. In the marketing and communication sector, employees generally work on the basis of a fixed monthly amount, with consultants less shy of recording their hours as a result. In this sector, staff are often reluctant to telephone customers to tell them that the number of hours agreed has been exceeded.”
Moreover it appears from the research that on average around 70 percent of hours worked by consultants can actually be charged to the customer. “The management thinks that this figure should be higher. After all, why take on new employees, if your employees have excess capacity to spare? Appearances can be deceptive though: in general consultants experience their workload as fair to high, and they do not have enough time. So hours are disappearing somewhere”, says Van Haasteren. Because consultants do not record the actual hours they have worked, it is difficult for service providers to make accurate estimations of for example, staffing levels, expected profits and quotations.
About Maconomy Maconomy is a worldwide supplier of industry specific business solutions for the administration and monitoring of projects and processes within departments and organizations. The software solutions focus on financial administration, project management and administration, resource planning and traffic, Customer Relation Management, Human Resources, stocking and subscriptions. Business service providers such as consultancy and marketing communications agencies have real-time insight into business processes, enabling business operations to be optimized. Maconomy has more than 90,000 users worldwide, including Avnet Enterprise Solutions, Lost Boys, Deloitte, Edelman, VODW Marketing, Pricewaterhouse Coopers, KPMG and Publicis Groupe. Maconomy A/S was established in 1989. Its headquarters are located in Copenhagen.
Press contactMiranda Mens / Nina Breuning
Edelman
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