Case Study: Guardian Angel Homes Protects Against Unnecessary Labor Costs Time America
Assisted Living Care Provider Gains Real-time Control of Time and Attendance with Web-based Labor Management
Introduction
Guardian Angel Homes faced an uncommon challenge in the area of labor management. The company's business model demands significantly higher labor costs than other companies in its industry. However, these labor expenditures enable Guardian Angel Homes to deliver superior services – a successful strategy for outshining the competition.
Guardian Angel Homes is an assisted living community that provides a wide range of care to full-time residents in Washington and Idaho. Care levels range from minimal assistance to specialized care for Alzheimer's and other dementia residents.
The company endeavors to administer high-quality care in a unique facility structure. It differs from typical assisted living communities by creating a "home away from home" environment for residents. The homes that make up its campuses are free standing buildings with floor plans designed to resemble traditional family homes. Residents share common kitchen, dining and living areas, and can reside in either single or shared bedrooms. They enjoy the feeling of living in a non-assisted situation, while actually under the supervision and round-the-clock care of Guardian Angel Homes' experienced, professional caregivers (e.g. nurses, house managers, and other staff).
Although financially sound, this model requires more management and labor to maintain than large institutional facilities, such as hospitals or traditional nursing homes. With four campuses (two in Washington and two in Idaho) each consisting of at least four separate homes, the company's labor costs run approximately 20-30% higher than most assisted living homes. At 50% of the company's total cost, labor represents its largest and only variable cost. Guardian Angel Homes realized the need to replace its outdated workforce tracking methods with an automated solution that would enable better monitoring and analysis of labor costs.
Seeking a Better Way to Control Labor Costs
In early 2004, Guardian Angel Homes began its search for an automated labor management system that would produce real-time data. Because high labor costs were a key element in the company's success, Guardian Angel Homes didn't aspire to drastically reduce costs or overhaul its staffing practices. It primarily wanted insight into how labor dollars were being spent, so that it could correct problems in a timely fashion.
At the time, the company collected employee time and attendance information via magnetic strip card swipes. This data was then compiled in a manual bookkeeping system, which unfortunately, didn't allow management to view the past month's labor data until 30-40 days after the month ended.
Tyson Frantz, IT Operations Director, Guardian Angel Homes, explains: "With our former system, it was nearly impossible to get a real-time number on how many labor hours were being spent at the facilities because they didn't find out payroll until the books were closed. And, the data wasn't accurate, which lead to difficulties with operational effectiveness."
The operational issues were based in two areas – management of labor and time and an accurate, real-time reporting of employee attendance. Management was forced to wait as long as two months before labor-related problems could be identified, much less corrected. Employees didn't have real-time access to hours logged, available sick-time, or paid-vacation accrual. If employees perceived errors on their paychecks, they would need to ask management to resolve the issues for them at month's end. On the old system, this meant that they wouldn't receive an answer until up to two months after the inquiry.
Based on a recommendation from its payroll processing system provider, Guardian Angel Homes chose to implement NETtime®, a web-based labor management solution from Time America (OTCBB: TMAM). Time America is a leading provider of web-based, client-server and desktop time and workforce management solutions designed to help companies improve the tracking and utilization of labor resources.
Using NETtime, Guardian Angel Homes' employees clock in and out on personal computers. They can also check their current status in regard to sick days, overtime and vacation accrual. Now, managers don't need to manually compare paycheck discrepancies to hours worked, sick time or paid vacation logs. They simply access each employee's data with the click of a button.
Mr. Frantz summarizes the effectiveness of the NETtime solution, saying: "It's quite a burden off the shoulders of management… All upper management loves it because they call pull real-time labor reports."
Implementing Web-based Labor Management
When Guardian Angel Homes implemented NETtime, it also installed a new payroll processing system. The company's IT staff performed the installations and system integration themselves (without hiring on-site consultants). This decision proved cost-effective and successful, although Guardian Angel Homes' IT team did utilize the support services of its new technology vendors.
Mr. Frantz comments: "We relied a lot on Time America's support. We were able to be very frank with them, letting them know that we were doing something we hadn't done before and we were going to need a lot of help doing it."
In a particularly urgent situation, Guardian Angel Homes' IT staff couldn't get the new payroll system to accept data exports from NETtime. The IT team faced a major challenge. They were responsible for ensuring that payroll would be processed in three days, but knew that they would need to request customized code, which typically takes weeks or even months for software providers to deliver. Even so, they called Time America and explained their situation. By noon the next day, they'd received the customized export. That week, Guardian Angel Homes processed its payroll on time.
Realizing Immediate Benefits
Since launching NETtime in November 2004, Guardian Angel Homes has already achieved its primary goal for installing the system. Management now accesses real-time labor information, allowing them to correct issues as soon as they occur.
Mr. Frantz describes the success that Guardian Angel Homes has experienced with NETtime: "We needed a stronger way to control labor costs and that's what we've achieved." He continues, "We control our labor costs a lot better than we did previously."
As an example, in January 2005, Guardian Angel Homes noticed a 15% increase in payroll for its nursing staff. Management used NETtime to analyze the increase. Within ten minutes, managers realized the cause of the higher payouts and immediately planned a corrective course of action. Using its former system, the financials wouldn't even have been available for another 30-40 days after month-end. Guardian Angel Homes would've spent nearly two months' worth of unnecessary labor expenditures. With NETtime, they solved the problem within a single pay period.
source: Time America and Guardian Angel Homes