Admin robs business of billions

Sage, the market leader in cloud business management solutions,  today launched its second annual Productivity Tracker, which investigates the amount of time lost to administrative tasks. Launched in South Africa ahead of World Entrepreneurs’ Day (21 August), the study reveals that the South African ‘Productivity Puzzle’ is far from solved. 

The total amount of economic value lost to admin in South Africa in the last 12 months totalled R7.2 billion. Productivity losses caused by unnecessary admin are costing South African businesses R229 every second of the day – a slight improvement from the R231 per second reflected in the 2018 Productivity Tracker.

Sage commissioned its second annual Productivity Tracker study to YouGov, an international internet-based market research and data analytics firm, headquartered in the United Kingdom. The Productivity Tracker surveyed small and medium-sized businesses across 12 countries, uncovering the percentage of time spent during an average working week on unproductive administrative tasks; time that could be reduced by using technology and digital tools.

The admin burden continues to hold back the productivity of small and medium businesses:

• Across the 12 countries surveyed by YouGov, the average time lost to admin, which includes tasks such as chasing late payments, processing invoices and HR tasks, is 5.2%.
• South African businesses lost an average of 3.6% of their time to admin tasks.
• The analysis reveals that Spain reported the highest percentage of business working hours spent on these tasks, at 10.5%.
• The nation reporting the lowest amount of time dedicated to these tasks is Canada, where only 1.7% of business time is allocated to tasks per year. 

Pieter Bensch, Executive Vice-President at Sage Africa & Middle East, says: “The amount of time South African businesses spend on admin compares favourably to international benchmarks, but there is still more we could do to reduce the time businesses spend on routine tasks like generating invoices, paying taxes, chasing payments and issuing payslips.

 “Transitioning to a digital business model and automating more business processes can enable businesses to unlock significant value. On World Entrepreneurs’ Day, government and big business should also ask how they can help smaller businesses to boost productivity through reducing procurement paperwork, paying them on time, and subsidising new technologies.”

Global Snapshot: We Power the Nation – Productivity Tracker Insights

Methodology

This research has been produced by Sage Group plc (“The Group”). All primary research survey figures, unless otherwise stated, are from YouGov or are calculated by The Group using figures from YouGov.

To establish time lost, Sage commissioned YouGov to run a survey sample size of 1,466 small and medium business decision-makers ensuring a minimum sample size of 100+ in each of the 12 countries analysed. Fieldwork was undertaken between 19th March and 5th April 2019 and carried out online. We summarised findings as a single statistic for SME productivity, based on an average of business time spent on administrative tasks. This is calculated by assigning a mid-point to each of the answer bands for both business size and days spent by the business on administrative tasks, e.g. 7.5 for the band 5-10. 

For tracking the cost of lost productivity in 2018, the implied value has been calculated based on 2019 IMF data with changes vs 2018 extrapolated over 12-month changes when compared to the 2018 ‘Sweating the Small Stuff’ valuations. The research has assumed a linear time-bound impact using GDP growth figures taken from the IMF’s World Economic Outlook (April 2019).

While a compound effect of underinvestment in technology may cause the costs to accelerate through the year, the adoption of productivity-enhancing tools for business may counteract this effect.