Recent news reports stated that OR Tambo municipality in the Eastern Cape has spent over R3-million on overtime in just three months, with some employees doubling their salaries. The response from the metro made clear that overtime is a problem, exacerbated by ghost employees inflating the payroll, over which it has no control, says Kriya Govender CEO of PRP Solutions.
It’s not the first time we’re hearing stories like this, and unfortunately it won’t be the last. Just Google “ghost employees South Africa municipalities” and you’ll find countless similar stories. The OR Tambo example is just one example of an issue that plagues organisations, both public and private and it’s one that has no place in any business environment.
The prevalence of payroll fraud has become a growing challenge in South Africa. Employers with ineffective people management systems and inadequate controls are easy targets for those claiming false overtime, fabricating timekeeping or making payments to ghost employees. So how does it happen?
Not having the correct management tools in place to plan more efficiently to avoid overtime. Without these tools, favouritism can often skew the allocation of overtime resulting in increased costs. Without robust controls, abuse and fraudulent activity often creep into the organisation. Tempted by additional cash or the accumulation of time off, employees may begin to exploit the lack of real-time monitoring and control. Without the necessary system in place, working hours are often inflated.
Fraudulent labour compensation is completely avoidable due to the ready availability of technology which integrates time and attendance with payroll, which is fast becoming commonplace for many organisations who manage large workforces. Some of the best solutions to these problems are developed locally by South African organisations.
The results of implementing these technologies speak for themselves. Effective use of automated people resource planning (PRP) solutions provides organisations with savings of up to 30% in unplanned overtime costs, 15% on payroll costs and improved productive time by up to 15% and or more, simply by eliminating administrative inefficiencies. These results deliver an excellent return on the investment in the technology.
Besides significant cost-savings, the same technology provides information in real-time. This facilitates faster and better management decision making, resulting in improved people productivity … and freeing up managers to spend more time leading their teams.
This kind of technology allows for clear scheduling and planning of workforces, maintaining staffing and critical skill levels in real time, which is crucial for anyone in the service delivery game including municipalities. This shameful practice of squandering private companies and tax payer’s money needs to be rooted out.
