In a recent McKinsey & Co. study looking at allocation of time by nearly 1,500 executives around the world, only 9% were “very satisfied” with how they spent their day. Nearly half admitted they don’t concentrate sufficiently on guiding the strategic direction of the business. Whether companies want to admit it or not, the way senior execs allocate their time affects not only the individual performance, but also that of their organization.
The Future Foundation conducted research in seven countries including the United States to understand the costs associated with poor people performance. The results revealed that current approaches to people management are draining corporate profits. Here are some pretty eye-opening stats from that study:
- Senior executives claim they spend seven weeks a year — or over an hour per day — managing badly performing employees.
- U.S. managers in larger organizations (>$8.5M in turnover) are spending 41 days, or eight weeks per year, on managing poor performers.
Take a long hard look at your day and break down your tasks. I’ll bet that most of it is spent managing people and taking care of the day-to-day tactics. A shockingly small proportion is spent attending to the activities that inform the long-term strategy of the company and support growth, higher revenues and increased market share.
When it comes to the Finance & Accounting department, where is your time best spent? Managing people or using that time to concentrate on the work that matters?
The Overlooked Benefit of Outsourcing
When you outsource transactional work to a provider, you transition from a people manager to a vendor manager. As a result, you no longer have to deal with:
- Career discussions
- Career pathing
- Absences and vacations
- Turnover issues
- Performance reviews and improvement plans
- Mentoring and coaching
- Daily employee management
- Employee documentation
- Succession planning
In short, outsourcing helps reduce the amount of time executives spend on a day-to-day basis managing people, so you can spend more time on strategy and growth. Let your provider take care of the people managing part. We’ll handle motivating people, training them, cross-training them, conducting reviews and so on. It then becomes the FAO provider’s responsibility to attract, retain and manage talent.
Manage Outcomes, Not the Inputs
You can take all that time and focus on managing outcomes, not the inputs. Labor arbitrage aside, that’s a pretty compelling value proposition. Then add in the ability to easily scale up or scale down talent during peaks and valleys or during periods of growth. And, don’t forget that providers run three shifts a day, so a provider can get more of that transactional work done, more quickly and more efficiently than a retained organization can.
If you are looking to get away from managing people and really improve your F&A function, why not arrange a free assessment of your current practices with one of our finance experts, schedule an appointment today.