Thursday, 19 August 2010

540,000 hours

I was chatting to one of our large AEC customers last week. They have about 1,000 CAD, BIM & Engineering software users around the group. During our chat, we discussed the fact that they are putting together a business case for management, aimed at securing additional budgets for investing in new training & learning tools. As part of this process, they worked out that they spend approx. 540,000 man (or woman) hours EACH YEAR, producing CAD drawings. And that's just in the UK, which is only part of the wider group!

I don't know what their hourly charge-out rates are, but let's say, for argument's sake, that the figure is £100/hr. That's a cool £54M per year on CAD production alone.

Now let's picture the impact of a 2% improvement in productivity across the year - that's over £1M in savings, or half a million quid for every 1% increase!

Suddenly, spending a few grand on testing and training tools starts to make a lot of business sense!

Let's look at some more numbers;

Take an average salary of £25k p.a. and a 225 day working year.

For every 1% improvement in productivity, a practice will save £250 or 2.25 days per person per year. Targeting a 5% annual improvement in performance, this is worth £1,250 or 11.25 days per person per year. (11.25 days = 90 working hours (average 8 hour work day)).

For a firm with 20 staff, this is worth the equivalent of a new member of staff! (20 x £1,250 = £25,000).

Now let's look at hiring; how much does it cost to employ inappropriate personnel for 3 months?

Assuming a £25k annual salary:

15% agency fee = £3,750
3 months’ salary = £6,250

Assuming £18/hr:

7.5 hrs x 5 days = £675 x 12 weeks = £8,100

These examples don’t include advertising costs for staff employed direct, or the cost of re-working for drawings which weren’t done right first time.


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