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June 4, 2021 | Time and Attendance | Posted by Brandon Grinwis, Chief Financial Officer at Ascentis

6 Workforce Metrics with Significant Financial Impact

Knowing which metrics and measurements to focus on is a perennial challenge for CFOs and finance departments, and the current state of workforce management makes it that much trickier. For much of 2020, many finance teams were forced to shift their focus from maximizing profitability to simply staying operational. Even as most industries are well on their way to recovery, the lessons learned from an unorthodox financial year continue to resonate. That has also changed the way we will consider which metrics matter most in the near future. Here are a few key metrics that should be on every CFO’s mind.

Health and safety

In the wake of last year’s scramble to adapt to the workplace realities of the pandemic, health and safety metrics have moved to the forefront in ways they seldom have before. CFOs are seeking out data on absences for sickness or injury, varying rates of absence across multiple worksites, average lengths of time off, and other wellness-related data that was previously thought of as more the domain of human resources. This new health focus for financial professionals makes sense, as the importance of worker health and safety is at a new premium. A business with a poor record of protecting employees’ health can suffer serious repercussions in the post-pandemic era, from reputational damage to shortages of quality job applicants to lost productivity due to widespread absences. That makes workplace health and safety very much a financial issue as well as an HR issue.

Some noteworthy health and safety key performance indicators (KPIs) might include:

  • Number of accidents and injuries reported
  • Lost-time injuries per employee
  • Frequency of equipment issues
  • Number of workers and managers trained in safety management
  • Frequency of sick leave requests

Data analysis

A busy workplace generates a lot of data, and in today’s workforce data is at the core of nearly every financial decision. Surveys have shown that using data more efficiently has become a top priority for financial professionals in recent years. In order to make sound, data-driven choices, your CFO needs a reliable and accurate system that not only records, analyzes, and reports that data, but also helps parse out the information that really matters. Knowing when your workforce clocks in and out, which shifts are most productive, how frequently workers take FMLA leave, and other key time and attendance data can factor into any number of financial and staffing decisions going forward.

Some noteworthy data analysis KPIs might include:

  • Overtime hours
  • Fraud detection rates
  • Productivity by shift
  • Paid time off and leave requests
  • Employee retention rates

Budget forecasting

Recent experience has shown the working world that it’s impossible for organizations to be prepared for every situation. On the flipside, however, we have also seen clear evidence of how important it is to be as prepared as we possibly can be. Developing an accurate budget forecast is vital to establishing a consistent, reliable experience for your employees, your customers, and your stakeholders. A budget forecasting strategy should incorporate both an automated data analytics system and direct feedback from key players within your organization, as well as a reliable set of templates and financial tools that cut down the time spent collecting and recording that data.

Some noteworthy budget forecasting KPIs might include:

  • Annual cost of employee benefits
  • Projected employee turnover rate
  • Projected new hires for the coming year
  • Compliance-related changes in regulations or policies
  • Cost of learning management and employee training programs

Job and labor costing

A key part of budget forecasting is determining how much the labor, materials, and overhead that keep your business running will cost in the coming years. Studies have shown that businesses that accurately forecast personnel costs hit their earnings benchmarks by a considerably wider margin than those with less accurate labor costing. Having quick access to data on expenses, scheduling, time off requests, overtime pay, and related factors allows a management team to envision just how much labor costing they will need to account for on a specific project. That information in turn informs everything from budgeting to hiring to equipment procurement. By assessing historical labor costing data and communicating closely with management teams, your financial professionals can draw a more accurate picture of the true cost of doing business.

Some noteworthy labor costing KPIs might include:

  • Total employee compensation
  • Projected hiring and onboarding costs
  • Worker productivity by shift
  • Total paid time off requests
  • Employee absentee rates

Compliance

Regulatory compliance is a key concern for virtually every area of an organization, and few executives are more acutely aware of that than the CFO. From state and local tax requirements to Occupational Safety and Health Administration (OSHA) safety regulations to federal employment laws like the Family Medical and Leave Act (FMLA) and the Fair Labor Standards Act (FLSA), the financial team needs to be front and center on dozens of compliance considerations at any given time. Not only does non-compliance put an organization at risk of heavy fines and sanctions, it can also drive down employee morale and cause serious damage to a company’s reputation.

Some noteworthy compliance KPIs might include:

  • Overtime hours
  • Number of employee leave and paid time off requests
  • Total OSHA violations
  • Total employee grievances or lawsuits filed
  • Total regulatory compliance expenses

Opportunities for automation

As technology continues advancing at a rapid pace, so do opportunities for administrative streamlining. Automating outdated manual processes is a huge potential money-saver for most businesses, but it can also be risky to engage in too much automation for automation’s sake. When looking at new tech solutions, a CFO should consider not only the projected monetary savings and boost in productivity, but also potential new incomes facilitated by the technology, impacts on customer satisfaction, the length of time needed to realize a return on investment, and other more subtle financial impacts of automating.

Some noteworthy automation KPIs might include:

  • ROI on technology investments
  • Productivity rates before and after automation
  • Customer satisfaction rates before and after automation
  • Employee engagement rates before and after automation
  • Total instances of time fraud

Financial operations are one of the more complicated aspects of any organization, but also one of the most beneficial to a company’s overall success. By planning ahead and making wise use of both the technical and human resources at your disposal, your finance team can play a key role in driving your organization to continued profitability in the years to come.

Want to find out more about automating your data analysis and workforce management processes? Contact Ascentis for a demonstration today.

Brandon joined the Ascentis executive team in 2019. He brings more than 15 years of leadership in driving growth, efficiencies and profitability at high-performing technology companies. As CFO at Ascentis, Brandon is charged with managing financial operations to support the company’s growth as well as leading the finance and accounting departments. Before joining Ascentis, Brandon was Vice President of Finance & Business Operations at Code42, a fast growing global enterprise SaaS provider of data security technology. Brandon has held financial leadership positions at Digital River and Lawson Software, two other high growth, Software-as-a-Service based businesses.” Brandon received a B.A. degree from Ohio University and a master’s degree from Notre Dame.