One of the most important indicators a company's management must monitor is the percentage of non-productive employee time, in other words, time that is not spent creating value.
This category includes time spent in meetings, administrative tasks, training, time spent waiting to be assigned to a project, on holidays. When entering a timesheet, this time is often labeled as "administrative tasks" or "other".
Of course, it is impossible (and not desirable) to achieve 100% of productive time. There will always be team meetings, individual meetings between an employee and his manager, employees that go on vacation or have training.
However, in order to ensure that non-productive time does not take on excessive proportions, employees have to respect a certain ratio. In parallel, reducing periods of inactivity, "administrative tasks" and "other" would be optimal.
It is therefore useful to set a target rate for productive time, for example: 80% of employee time. For example, for resources working on billable projects, 80% of their time must be spent on billable activities related to these projects, with the remaining 20% devoted to administrative or operational activities.
If this goal is not achieved, it is crucial to investigate the root causes and identify proactive solutions to avoid making the same mistakes over and over again.
For example, you could ask yourself:
- Is absenteeism involved? According to Forbes "absenteeism is an employee's intentional or habitual absence from work. While employers expect workers to miss a certain number of workdays each year, excessive absences can equate to decreased productivity and can have a major effect on company finances, morale and other factors ". Therefore, you would have to take immediate action to reduce the absenteeism rate by involving the human resources department, by using an employee assistance service, or by setting up a health and wellness program.
- Are several resources in between projects? Are they currently working on anything right now? If you identify resources with a high rate of non-productive time, it is crucial for the management to find projects that match their skills so that they can assign them to a project rapidly.