"It's budgeting time of the year, my favorite time!", said no one, ever.
But seriously budgeting season is one that we all have to go through, and I've got a few common situations that have come up in my years as a budget approver.
I find that budget requests are a great time to have an open dialogue with my leaders about the root cause of why they are requesting certain adjustments, and these conversations produce valuable insight just in time for us to work new ideas into the budget.
One of the most surprising things about budget season is that the additional requests for people in the budget can often be solved creatively with digital solutions for much less cost.
Here are three examples of common requests and how you might justify a digital solution instead of a human one.
When your team asks for overtime approval
A team asking for overtime is a classic sign of an overworked department. You might say that is not surprising, that everyone in your business is overworked! One thing I like to do when people ask for overtime is to have a detailed conversation with them about where they are spending their time.
Sometimes I find that they are spending significant amounts of time on an activity that should take them far less time. We start here by asking them questions and determining the root cause of the task taking longer than expected. Common opportunities are:
- They don't know how to do the task efficiently.
- They don't have access to the right information.
- They aren't effectively delegating the task to the right person.
Most often the people asking for overtime are lower-level leaders, and they might even be new to the role or to leading others in general. Think about your leads and supervisors who are at the pinch point between managers and the feet on the floor. They need help from you to see the root cause of their time issues and to help them reset the expectation on how long something should take.
You ultimately want your leaders to be able to identify the root cause: "Hey boss if I had access to that information that you just pulled up, I could do this part of my job in half the time."
10 times out of 10 it is most cost effective to give an employee access to the right information than to pay habitual overtime.
Ten years ago, digital information licenses were too expensive to hand out to every leader in the factory, but prices have come down and information is the new currency.
Getting a leader access to the right information will prevent them from interrupting your meeting or calling you at home on the weekend to find out the data. You instead can plan to issue a license to each supervisor on every shift. Adding licenses will pay for itself not only because you won't be pestered for the information but also because leaders with the right information make better real-time decisions. You want your leaders to make the best decisions possible in moments of chaos on the factory floor, without having to give you a call and ask you to look up some information.
"Information is everywhere, but we need humans to interpret the data". - Dan Pink
Adding a few extra licenses for your digital solutions are much cheaper than paying overtime to your team and will create higher functioning leaders in your development pipeline.
When your department manager requests additional headcount
When you are preparing for your next budget cycle with department mangers, often these managers will bring up the need for additional headcount. Tasks are taking longer than usual, or perhaps the headcount needs right now are related to staffing being out for quarantine due to COVID exposure.
When presented with a request to hire more people, managers need to ask the hard questions about why the additional headcount would solve the issue at hand. Often, with the right data in the right person's hand, you can meet the needs of the request with information, not additional headcount.
For example, think about a manufacturing facility that needs a quality sign-off at the end of every changeover. Each manufacturing line is waiting for quality for somewhere between 10 minutes and 4 hours before the sign-off person can go out to the floor to confirm the process.
At first glance, you might think to ask for more staffing to reduce or eliminate the wait times for quality sign-off, and you wouldn't be alone in that assumption. However, this is a perfect example of how you can use information to replace the need for additional headcount.
The root of the problem is that the quality sign-off person isn't present on the line when needed, which can be solved by giving the person better information to plan their day and attend to the sign-off and the other work they are assigned to do. You could accomplish this with a digital system that helps the quality sign-off person predict when they will be needed on the line and then notifies them when someone is waiting for them.
A digital system will cost you far less than the additional headcount and will likely come with other features to add value to your business.
Remember that digital systems work across all 4 shifts, when an individual person can only fill one spot on one shift. Now you can justify the spend on the digital system and still keep the budget lower than the headcount increase.
When your turnover is causing you to carry higher headcount
In many manufacturing organizations, turnover is a natural and expected outcome of hiring. Manufacturing work is physically hard, carries a big responsibility, and often has undesirable hours. Managers use these excuses to justify turnover numbers that are shockingly high.
In my experience, none of those are actually good reasons for turnover. Hear me out - when the individual took the job in your facility, they understood the type of work, the importance placed on getting things right, and the schedule required. Something else went wrong while they were employed that caused them to tip the balance of the scales and quit. My point is, those reasons weren't surprises to them after they were hired, but something else surprised them... and you need to figure out what.
When turnover is high in an organization, there is no "one size fits all" glaring issue, and the solutions are found over time with attentive leaders who listen to feedback. When I walk the floor in manufacturing organizations, I can always count on the same thing happening: employees talk, and I listen. That's it, it really is as simple as listening when they talk. As managers in manufacturing organizations, we can get used to running from crisis to crisis and putting out fires all day. This doesn't leave a lot of time for listening to our teams unless we block our calendar and hold the line on all other work during that time. And how many people can do that pre-pandemic? Not many. During-pandemic? even fewer.
Employees in manufacturing want to be heard. In my experience, listening is 80% and fixing is 20%. In most conversations, I would try to find a way to suggest that the person fixes their own problem. In rare conversations, I would intervene or take a follow up from the conversation.
Here is where I make the digital suggestion: giving your front line factory workers a tool to collect information and gather feedback will do the listening for you. A digital solution in every employee's hand offers a way to share information with leaders about what issues are happening to them and what kind of impact those issues are happening. When you collect this information digitally, the digital solution is automatically summarizing and sending reports, then you as the leader get to see the feedback real-time and choose when or if you should intervene.
You can make smart decisions about who needs additional training, or where capital should be spent next year. You can recognize that an employee has strengths in one area and shift them to another team to leverage their strengths. By having eyes and ears on the factory floor at all times through a digital solution, you can be a better listener and lower your attrition and turnover numbers.
People are likely to stay working when they feel that they have an advocate and a support system at work. Ever heard that people quit bosses, not jobs?
Rather than continuing to spend the money on hiring and training employees just to have them quit, instead spend the money on a digital solution for everyone on the factory floor and retain your talent for significantly less cost.
You can reinvent your performance management system to lower your attrition and improve the employee experience for less than the cost of hiring one additional person.
These are some of the common budgeting questions and opportunities to leverage digital technology to reduce your operating expenses. We would always love to hear your feedback and the common questions that you encounter during budgeting season.