Obviously it’s nonsense to calculate the per pound cost of a meeting. However, it does highlight that meetings cost money and may be so little value adding that people – ahem - are not participating with full creative passion. The basic mathematical pattern is that the more people that attend, the more highly they are compensated and the longer the meeting lasts, the more it costs. Go figure. Plus the opportunity cost of whatever isn’t getting done during the meeting.
Collaboration is essential to business success. However, ‘meetings’ are not synonymous with ‘collaboration.’ Meetings can be great for communication and team building – especially if they involve free food, drinks and karaoke – but they can also be excluding and time consuming. Fortunately, there are numerous organizing technologies that allow people to network and collaborate efficiently, effectively and as needed, at a distance. These technologies, which include video conferencing, co-authoring tools, wikis, surveys, instant messenger, email, blogs, and web based communities, allow companies to multiply interactions while improving the work life balance and pay-to-work ratio for all employees. Consider Wikipedia, which is a model example of inspired collaboration without meeting – or pay, for that matter.
A recent McKinsey report What Matters: Using Technology to Improve Workforce Collaboration estimates that anywhere between 20-50% of all collaborative activity today is wasted effort, which is high enough to merit serious attention. Part of the problem is a tendency to use a top down one-size-fits-all approach to collaboration instead of trusting people to identify the most value adding interactions. Other culprits include poor planning, lack of a clear topic owner and waiting for feedback. Generally speaking, the value added by collaboration decreases when more time is spent meeting (input) than doing actual work (output).
There are also generational differences when it comes to collaboration. According to a fun Time Magazine article ‘The Future of Work: When Gen X Runs the Show’, Generation Y is well-versed in online collaboration where leadership is defined by who contributes the most toward solving a problem at any given time – all virtual, of course.
Time Magazine predicts that by 2019 – 10 short years that will fly by, especially for those of us with children - 40% of the workforce will rent out their skills. This will allow employers to reduce costs in areas that are more cyclical and allow professionals to build up a wider network of contacts and experience than the traditional employment model offers. Many of these modern professionals will charge by the hour and may work remotely, requiring collaboration tools that allow them to work in teams.
Now, consider for a moment what it would mean to compensate your knowledge workers by the hour instead paying them an annual salary. If your company employs consultants you already appreciate what this means, i.e., you have to pay them for each hour of work they do, whether that work involves producing something or sitting in a poorly organized meeting where everyone chats about their weekend. Two hour roundtable status meeting? No problem, it’s your dime. Cha-ching.
Not surprisingly, when companies pay people by the hour they tend to pay obsessive attention to how people spend their time. For example, when I was a project manager one client did not allow my team to charge in travel time, status reports or internal team meetings. Needless to say, we minimized the time we spent on these activities and got amazingly efficient at team communication, using fairly simple low tech methods.
Unfortunately, few people on the financial side of the house measure how salaried employees spend their time because it doesn’t seem to impact the bottom line. But it does, in two ways:
1. Employees notice if they work more for the same money and it can drain both their loyalty and creative energy, especially if they feel the extra hours are unproductive.
2. Whatever employees spend their time doing involves an opportunity cost somewhere else. It therefore makes sense to encourage employees to focus where they add the most value and provide tools that help them collaborate more efficiently.
There’s no shortage of literature out there about how to motivate employees when you can't afford salary increases but for many companies the problem is deeper as a reduced workforce struggles to do the jobs of departed colleagues. Effectively, people working longer hours have received a pay cut when you consider their salaries in terms of hourly rates. If someone receives $100K annually and works about 50 hours a week, their ‘hourly’ rate is about $40. If they are now working 60 hours a week, their hourly rate effectively drops to about $35.
You may not be able to give these employees a raise but you can think about how you and they can get the most bang for each salary buck, starting with a hard look at your collaborative tools and processes.
Or, if that seems too complicated, just keep an eye on those pounds.
Laura Schroeder is the Product Manager for Compensation Solutions at Workday, headquartered in Pleasanton, CA. She has more than twelve years of experience designing, developing, implementing and evangelizing Human Capital Management (HCM) solutions in the US, Asia and Europe. Her articles and interviews on HCM topics have been published in national and European trade journals. She currently lives in Munich, Germany and enjoys reading, writing and spending time with friends and family.
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