Raise your hand if your organization experienced network slowdowns or even an outage in the past 12 months.
Now, what if I told you that every time this happens, it costs your business anywhere from $1 million (typical mid-size company) up to $60 million (large enterprises) a year? A recent IHS study found that the actual costs to fix the downtime issues amount to only about 5% of that cost — the other 95% are caused through loss of productivity (78%) and lost revenue (17%)!
Furthermore, a recent research report entitled Damage control – the impact of critical IT incidents revealed that the average UK business has to deal with 3.5 critical IT issues every month resulting in a loss of £200,000 a month. This amounts to an enormous economic loss!
Today, I want to show you how you can calculate your organization’s cost of lost productivity as well as dive deeper into what are the biggest causes and how you can prevent them going forward.
How To Calculate Productivity Loss Due To IT Issues
To calculate the potential productivity loss due to IT issues, you can follow a very simple formula:
Productivity Loss Due To IT Issues = (Corporate Turnover/Number of FTE/Yearly Productive Hours Per Employee/IT Dependency Factor)*Number of Incidents Per Year Company-wide
Let’s go through this in more detail:
First, you have to know your annual corporate turnover and how many full-time employees (FTE) your company employs. If you divide the annual turnover by the number of employees, you get the annual turnover contribution per FTE. This can now be divided by the number of productive hours in a year per person. resulting in your hourly productivity per FTE.
The number of productive hours depends on your vacation and weekly work hour policies, but for this calculation, let’s assume 10 vacation days. This means, if your employees work 254 days in a year at 70% capacity for 9 hours a day, you end up with 1,372 productive hours.
For example, if your numbers are as follows
- Corporate turnover: $100,000,000
- Number of FTEs: 1,000
- Thus, annual turnover contribution per FTE: $100,000
- Thus, hourly productivity per FTE: $100,000 / 1,372 = $72.89
a single employee contributes, on average, almost $73 an hour to your bottomline.
Now, you have to estimate your end users’ IT dependency factor. This refers to the percentage of daily work activities that are dependent on information technology, such as computers. Of course, this factor varies greatly by individual company and niche. If your business is highly dependent on working computers, for example software developers or data scientists, there is not much work one can do with pen and paper while waiting for things to load. A non-cash register retail employee, on the other hand, is much less dependent on IT.
Lastly, it is helpful to know how many incidents your users have reported on average last year, how critical these were, and how long it took to resolve them. For this example, let’s assume only two critical incidents per month per employee that took an average of 4 hours to resolve.
Considering a 50% computer dependency, the cost for lost productivity per employee per year due to these IT failures would cost the company $3,498! Now scale that up to a thousand employees and you end up with $3.5 million in lost productivity — and that is just accounting for critical IT failures!
What IT Issues Cause End User Productivity Loss?
Obviously, if your co-workers cannot access their devices at all because of critical IT failures, they will experience the highest impact. However, this doesn’t mean the PC or notebook won’t switch on or is frozen. Productivity loss can come from any issue that cannot be resolved remotely with your current setup and results in the employee having to walk over his or her device to your offices to get it checked out. Of course, these issues are the most severe and cause up to 2 to 3.5 incidents per month per employee — depending on which study you believe.
In addition, there are a lot of less critical incidents — for example, Outlook isn’t loading properly or the end user cannot print a document. While these are annoying and hinder normal work, the end user is still able to access his or her device and switch to another task if needed.
However, there is a third category of IT issues that is often overlooked or ignored: a slowdown caused by the operating system consuming too much CPU or RAM, a file loading, or an app opening. Since almost 50% of today’s workforce consists of millennials, a generation prone to multi-tasking and distractions, a 10-second slowdown can have serious effects!
A recent study has found that 75% of millennials quickly view social media if they have to wait for more than a few seconds — and spend 33 minutes on average each day doing so. 13% even admit to being guilty of spending more than an hour on their social media accounts during work.
That’s 5 hours a week spent not productively working because the PC was a few seconds slow!
Proactive Issue Resolution = Improved Productivity
As you can see, it isn’t always the bigger system failures that have the biggest effect on productivity. Therefore, it is important to improve the health and performance of individual devices proactively to minimize delays or smaller issues that users might try to find a work-around for themselves or by asking a co-worker. The best way to accomplish this is by proactively detecting and fixing an issue before it starts to impact the end-user.
Get The End User Involved
First and foremost, your end users need to understand the global impact their actions have. Show them how spending 30 minutes on Facebook because they were waiting for Outlook to open impacts the entire organization. Get them involved by collaboratively creating policies that minimize distrations and focus on shorter periods of work where the employee is completely mindful and immersed in his or her work.
Individual Device Health Scores & Recommendations
But that isn’t enough — there should be an actionable way for end users to improve. Empower them to take ownership of the health and performance of their devices by providing them with individual device health scores and recommendations.
This can be accomplished by using a tool like Access Agent, for example. In this scenario, Agent is installed on every device, proactively looks for areas to improve, and reports back to the end user with a consolidated health score and actionable next steps the user can take then and there to improve that score.
Automatically Detect, Ringfence, And Fix Issues
If Access Agent identifies an issue that could potentially become a bigger problem, it will attempt to fix it and then scan your environment for other devices with the same configurations. This way you can immediately ringfence the problem before it even begins to bother a larger group of end users.
IT issues cost businesses around the globe millions of dollars every year — but a vast majority of those costs aren’t attributed to fixing the issues themselves but to the productivity that is lost because of them. Often, even the smallest delay can cause a lengthy distraction.
IT can help minimize these issues by proactively getting the end users on-board and implementing automation tools, like Access Agent, to detect and fix potential issues. This will keep the computers running quickly and thereby allow the user to be more productive.