If your document imaging service company is like mine, labor is your number one expense, by far. When you want to make an impact on your profitability, labor is also the biggest needle you can move on the dial. But, you can’t just pay less, save on labor and hope nobody figures it out. Eventually, not paying competitive wages has its own consequences like attracting and keeping talented people. So, what other options do we have if we want to increase profitability? We can increase prices. But like keeping wages low, continually increasing prices has its limits.
The one secret weapon your company can create that will help you keep your costs low, your employees happy and your prices competitive is to create a culture of high performance. Outperform your competitors! Working intensely and intentionally to improve the performance and productivity of your employees can explode your profits, make your life easier and bring financial rewards to your hard working team members and yourself!
To tap into this well of potential profits, you have to have the right tools. If you can’t easily measure employee performance, how can you tell if you’re improving? If you can’t quickly measure a job’s profitability, how do you know what to change to improve it? That’s where our PACE business operating system comes in!
With PACE, you can measure employee performance and job performance at the click of a button and in real time. No waiting until the end of the month to find out if you made money or not. For me, as CEO, being able to check the profitability of our largest clients and inquire with operations or sales regarding specific issues the system has revealed lets me feel in touch with my business, no matter if I’m in the office or on vacation.
So, why is PACE worth investing in for your imaging company? Because of the ROI. I’m surprised more owners do not think like me about profitability.
Here’s a quick case study:
Two different employees make $18.50/hour performing document scanning. They each work 40 hours a week. They each cost you about $800/month. They both work on the same project and same equipment. One performs at around 1500 images per hour while the other pushes their productivity to the limit and scans 2500 images per hour. This is all unknown to you, because you aren’t measuring employee productivity. .
How much more valuable is employee two? If you don’t know, you aren’t running a performance driven culture.
How much would it be worth to have both employees performing at employee two’s output?
Let’s say you average $0.05/image for scanning.
Employee One: 1500 x $0.05 = $75/hour
Employee Two: 2500 x $0.05 = $125/hour
Over the course of the month, both employees will cost about the same, but employee two delivered $125/hour x 170 hours in a month = $21,250 in revenue at a cost of $3,145, while employee one produced only $12,750. That’s $9k in profit difference in one month with one employee! What if everyone in the company had a goal that was improving each month? What would the financial impact on the business be?
PACE can help you report your employees productivity and by sharing that data with your staff and setting goals for improving those metrics, you can systematically deliver more profit to the bottom line. If you have a staff of 15 or more production employees, the payoff can be dramatic. In this example of a 15 person team, the company produces $1.5M more profit in a year if everyone is at employee two’s productivity rather than employee one. Lower cost for you, due to productivity, not wage reductions, same cost to the client, but wildly more profitable.
You can pay your employees more and still make more money when performance is a flexible variable that you control. Reporting on metrics and asking employees to set goals for themselves, reviewing those goals monthly and reporting on them weekly creates accountability. A focus on productivity has an impact without any other changes that will dramatically improve your business.
Here’s another side benefit of a performance culture. It will get your employees to complain about the things that make it difficult to get their work done. Once they care about their numbers, they will bring up things like the double feeds or jams that a scanner is experiencing, telling you there might be maintenance or new equipment issues coming soon. Clearing the way to make your staff as competitive as possible is a huge win for everyone. You can keep your prices competitive without sacrificing margins, you can pay your high performing employees bonuses that everyone sees, sending the message that your company values performance, and you can keep wages in check by tying them to performance. You only pay more when you are making more!
PACE has transformed Recordsforce into one of the biggest, most well respected document scanning companies in the US. Let us help you create a culture of performance in your service company!