"We'll Save Money by Having the Engineers and the Lawyers Do Their Own Photocopying"
When I moved to Pittsburgh from Boulder, Colorado, I spent the first year working as a temp. That's when I really started to learn how to perceive the direct connection between time and money.
Up-Front Savings
For a while I worked in a large engineering firm, writing and editing their proposals, requirements, specifications, inspection reports, etc. As I worked I watched in horrified amusement as they decided to save money by firing their copy clerks and making the engineers do their own photocopying. (Don witnessed something similar when he worked in Legal Affairs at a major bank in town, when they decided to make the attorneys do their own photocopying.)
They'd been paying the copy clerks about $10 an hour, plus the cost of benefits, taxes, and operating expenses. So they realized a total of about $20 per hour in savings per clerk. But these savings were all up-front. Once the clerks were gone, the real costs of the direct and indirect consequences kicked in and never slacked off.
Real Costs
For starters, the engineers were making a lot more than $20 an hour – and this was now the photocopy rate. Engineers generate a huge amount of paperwork, and it all gets copied. (Attorneys are even worse.) They even made photocopies of their emails. And since the engineers were not photocopy clerks, it took them longer than it had taken the clerks, who were experts.
The engineer's productivity began to drop: they now had less time in each 8-hour day for billable work because of the photocopying. Even if it was only 10 minutes a day it started to add up as the weeks went by. Plus, they were engineers. Given a choice between troubleshooting a recalcitrant photocopy machine and writing their functional specifications, what do you think they spent their time on?
Besides the fact that the photocopy work was now being done at a rate of $85 an hour or more, there were other, hidden costs that were not understood to be the result of the change in photocopy labor, but which were clear to me.
For example, the head of accounting couldn't figure out why the cost of paper kept climbing. The answer: the engineers made lots of photocopying mistakes and they wasted a huge amount of paper and toner.
They did not understand why the photocopy machine maintenance and repair bills began to increase. The answer: before, when there had been a problem with a machine, we just asked one of the copy clerks to fix it. They had kept the machines well-maintained and serviced so there was little downtime during the workday. Now we had to call in a repair specialist instead, and pay the emergency rate.
The office manager did not understand why the company began losing out on contract bids. He thought it was the result of an increase in competition. The answer: when there were problems with the copy machines during last-minute proposal preparation, it would cause us to miss the submission deadline, and therefore the contract.
My work area was next to the copy room, and I watched the entire tragedy play out right in front of me. It was amusing to watch them waste hundreds of dollars a day, but after a while it made me bitter. They were only paying me $12 an hour, and nobody listened to me when I tried to point out that firing the copy clerks was not cost-effective. I was just a temp, they said. What did I know about office management?
