By Emily Crowder, Motus
The workforce is always evolving, but now more than ever, there is a dramatic transformation in the way people work. Work today is mobile, and the lines between business and personal life are becoming increasingly blurred. As mobile technology becomes ubiquitous in today’s workplace, senior leaders must be aware of the financial challenges they face in managing a new breed of mobile workers.
Non-Revenue Generating Administrative Activities
In an effort to empower and support employees in the field, leadership has invested in mobile technologies and workforce management solutions such as CRM, T&E, and vehicle reimbursement, to name a few. These leaders have the best intentions of providing their workers with the technology to make their lives easier and more productive – but all too often, they end up creating a series of disparate systems and administrative tasks that make the mobile worker’s life more challenging and confusing. Workers end up spending a significant amount of time each month trying to log all activities and expenses across multiple systems of record – time that could be spent meeting with clients and generating revenue. As more and more tools become available to mobile workforce managers, it’s important that leadership explore solutions that are easy-to-use, reduce administrative tasks, and return valuable time back to employees.
Manual Reporting: Time Consuming, Inaccurate, and Costly
Despite the advancements in technology over the past decade, many companies still rely on spreadsheets and paper-based reporting to capture employee expenses and activities. The time required to manually maintain these records represents a huge loss in productivity. In fact, a recent study by the Aberdeen Group found that employees who leverage mobile travel and expense management apps save over 4.5 hours a month.
Not only is manual reporting time-consuming, but it is also wrought with inaccuracies. Time- strapped employees, who must manually input each expense, may inadvertently enter incorrect data or may estimate in an attempt to save time. For example, an employee may estimate that 80% of the miles she drove during the month were for business when, in reality, her actual business mileage was much less. If you’re reimbursing employees for the business use of their personal vehicles or charging them for the personal use of company vehicles, this unintentional over- reporting quickly adds up. Fortunately, automated solutions exist today that save time, reduce inaccuracies, and ultimately yield cost savings.
Capturing Costs Across a Wide-Spread Employee Base
Technology has provided employees the ability to stay connected while working remotely, but many employers haven’t yet figured out a way to capture localized costs across their increasingly dispersed workforce. In order to reimburse employees fairly, employers must collect, record, and account for the many costs mobile employees incur while working. These costs vary greatly from state to state, and even town to town, which makes the process difficult and creates huge administrative burdens. Overwhelmed, financial leaders often turn to a one-size-fits-all expense policy. This offers a simple solution that is easy to administer, but it is costly and inequitable. Some employees may be under-reimbursed for business costs, while others are over-reimbursed. Over- reimbursing employees is clearly costly to employers – but under-reimbursing can be equally (if not more) costly, as it exposes companies to legal risk. To reduce their potential costs, financial leaders must take a new approach to reimbursement and expense policies for their mobile workforce – one that considers the actual costs each employee incurs when conducting business.
Keeping Abreast of Labor Regulations
Employers are required by the Fair Labor Standards Act (FLSA) to pay employees minimum wage, and many states have additional employee-protection laws that employers must uphold. Though most employers are aware of these laws, the challenge of calculating and providing fair and defensible vehicle reimbursements often times make adhering to these regulations difficult. Employers who fail to meet these laws leave themselves exposed to class action lawsuits, many of which result in multi-million dollar settlements. Domino’s, for example, is currently involved in two class action lawsuits, which allege that employees were effectively paid less than minimum wage due to insufficient mileage reimbursements. While most organizations wouldn’t intentionally violate the minimum wage law, inaccurately reimbursing mobile workers can end up being a very costly mistake. To reduce the risk of similar legal violations and lawsuits, senior leaders need to regularly evaluate their policies to ensure that they are compliant and accurate for their mobile workers.
Managing a mobile workforce can seem like a daunting and overwhelming task to financial leaders, especially as technology continues to blur the personal/work line. Fortunately, mobile workforce management doesn’t have to be another headache for already-busy CFOs. By addressing these challenges with senior leadership and investing in the right tools, employers can greatly reduce costs, increase efficiency, and mitigate inherent risks.