How much time does your company lose to manual processes? How to work it out in two weeks

The profit and loss account has no line for “time lost retyping”. An employee who moves data from an email into a system is in payroll costs, just like a salesperson talking to a customer.

The effects of manual work are spread across many items at once. Some of it is overtime, some is late quotes and invoices, some is errors and fixing them. Each of these looks like a separate problem.

That is why the management board usually knows how much the company spends on office space or fuel, but not how many hours a month the team spends on work a system could do. This figure will not appear on its own – you have to calculate it.

You do not need to analyse everything each person does. It is enough to count repetitive tasks that require no judgement or specialist knowledge. Below are the five groups where they are usually most common.

For the record: a 2012 McKinsey Global Institute study attributed almost half of knowledge workers’ week to handling email and searching for information. Those figures predate the spread of Teams and will not replace measurement in your company. But they show that this is a large share of time, not a trivial one.

For each task you need three figures: how many times a month it is repeated, how many minutes it takes each time and the hourly cost of the person who does it. The formula: hours per month = number of repetitions × minutes ÷ 60.

Calculate the hourly cost as the employer’s full monthly cost divided by the hours actually worked, not by the contracted hours. The full cost covers gross salary plus about 20.5% in contributions and levies paid by the employer.

For example, a gross salary of PLN 7,000 gives a full cost of about PLN 8,430. If about 120 hours of actual work remain after deducting holidays, meetings and breaks, an hour costs about PLN 70. This figure is good enough for comparisons, even if it is not accurate to the last penny.

The method requires no external audit and no pause in work. It needs one person to lead it and a few hours of conversations with the team. Below are the steps spread over ten working days.

It is important that the conversations do not sound like a performance review. Ask about tasks that get in people’s way, not about how much time someone “wastes”. That way you will hear the truth.

Take a hypothetical service company with 35 employees. After two weeks of interviews and measurements, the team collected the results in a spreadsheet, summarised in the table below. The hourly cost was set at PLN 70, based on the calculation in the section on the formula.

Approvals were calculated as follows: 35 people × 15 minutes a day × 20 working days = 175 hours. For quotes, only the manual assembly of data was counted, i.e. 1.5 hours out of the three that a whole quote takes.

The total comes to 409 hours a month, or about PLN 28,600. That is the equivalent of more than three full-time posts, assuming – as in the hourly cost calculation – about 120 hours of actual work per person.

The last column is a cautious estimate of how much time could be recovered after changing the process. The total is 232 hours, or about PLN 16,200 a month. It is this amount, not PLN 28,600, that should be compared with the cost of the changes.

The calculation is simple, but it is easy to overstate or understate it. An overstated result leads to disappointment after implementation; an understated one leads to decisions being put off. Below are the most common mistakes.

If you avoid these mistakes, the result may be lower than your first impression. But the management board will trust it, and that matters more than an impressive number.

The spreadsheet usually shows a dozen or so tasks. Do not tackle them all at once. Pick two using the criteria in the list below, and start with the one that meets the most of them.

Before making the change, record the measurement results as a baseline. After three months, measure the same things using the same method. Only the comparison will show how much time has really been recovered.

If you do not yet have time for a full measurement, start with a conversation. The questions below help establish whether the issue is big enough to be worth two weeks.

If nobody knows the answer to two of them, that is an answer in itself. It means manual work in the company is growing unchecked, and it is worth measuring.