If you have a hunch some of your drivers are padding their hours, you're probably right. But how do you prove they're taking an extra 15 minutes here and there? And is it worth the confrontation?
In boom times, it's easy to look the other way. But in this post-recession economy, businesses are faced with growing revenue without increasing resources or, worse, trimming expenses by cutting staff.
Confronting drivers who are perpetrating timecard or payroll fraud is hard enough. But these tasks can be doubly difficult for business owners with small fleets, because they are more likely to juggle many responsibilities.
"With fleet sizes of 15 to 30 vehicles, there are so many things going on that the [business] owner can't always keep an eye on, especially without a dedicated fleet manager," says Robert Donat, president of GPS Insight, a tracking and navigation technology provider based in Scottsdale, Ariz.
Fortunately for small fleet administrators, technology has made the tasks of managing employees' time and reducing payroll costs easier to handle. Telematics-based GPS fleet management systems allow company executives and fleet managers to track vehicles, employees, driving routes and time spent on the job. As a result, this technology can improve a company's overall operational efficiency while reducing expenses and increasing profit.
No More Padding of Hours
The fleet tracking system from GPS Insight offers a Web-based platform that monitors driver productivity and vehicle efficiency, tracks idle time and confirms overtime costs. In addition, the system provides fleet managers with customized reports, alerts, routing and mobile-device access.
GPS Insight's customized reports show when and where drivers make poor decisions - or fraudulent ones - while on the road. "When there's an actual fraudulent scenario going on, we see people padding hours as much as 30 to 40 percent," Donat says.
Those reports monitor odd-hours usage, speeding and many types of location accounting. This data can be inputted into Google Earth for a more complete visualization of errant activities, Donat says.
In a typical scenario, GPS Insight technology was used to help CBMI, a Calif.-based plumbing, electrical and construction company, settle customers' disputes by verifying the work hours reported by employees.
The first week after the system was installed, the construction company caught three service technicians inflating their field reports.
"GPS Insight has saved us a minimum of 10 percent on our labor costs, since we believe we were losing up to 45 minutes per day per employee based on faulty timekeeping and outright misrepresentation on field reports," says Dan Zaharoni, the company's CFO.[PAGEBREAK]
Stop Congregating in the Field
Aliso Viejo, Calif.-based Telogis Inc. is a provider of location-based services. The company's fleet solution tracks vehicles, optimizes routes, monitors on-time or late arrivals and idling time and can generate reports for each vehicle, fleet, driver or team. Fleet managers also can receive alerts via e-mail or text messages for immediate exception reporting.
The Telogis Mobile solution integrates with Telogis Fleet and connects drivers in the field with the office. The system also has an "Hours of Service Compliance" tool, which automatically calculates and stores drivers' activities by recording on-duty, off-duty, sleeper and driving events - all while displaying the available hours of drive time. Drivers are given unique identification numbers so they can log in to the system and update their mobile time cards.
"If a vehicle goes home with the driver, the system has the capability of knowing exactly when the ignition was turned on," says Sean McCormick, product manager for Telogis Inc. "We can then track whether it has moved or not."
The system also can indicate if drivers assemble in a location other than the service yard to take an unauthorized break together, which McCormick terms "congregation of workers in the field."
Keeping Drivers Honest
Mike Ledieff is the operations manager for All Valley Environmental, a Fresno, Calif. biodiesel recycling company. The Telogis system has become an invaluable tool for managing All Valley's 12-vehicle fleet. "In this day and age, I wear quite a few hats at the company. I'm sales, insurance, risk management [and] operations logistics. I do it all over here," Ledieff says. "Having a system like this to do part of my logistics for me is awesome."
The system gives Ledieff the ability to generate a daily driver report to monitor inconsistencies in arrival and departure times, inefficient driving routes and time spent on location. "I'm not here at four in the morning when these guys are taking off. So if they're hanging out with each other and having a cup of coffee, it's going to show up in that GPS report," he says.
Since he started using the system in 2009, Ledieff has seen a 25 percent drop in payroll expenses. Driver efficiency has increased by approximately 25 percent, and fuel and maintenance costs are down 20 percent.
During the initial rollout of the GPS system, Ledieff caught some of his drivers purposely going off-route for up to 30 minutes at a time, or driving out of their way to have lunch at certain restaurants. In other cases, well-meaning drivers were spending too much time on the road because they didn't know the quickest way to the job site. The Telogis system can automatically provide drivers with the most efficient routes, ensuring that more time is made available for actual work.
In addition to keeping track of drivers' hours, the system automates some of Ledieff's customer service tasks. After a driver completes a recycling job, the system will automatically notify the customer via email when the recycling truck arrived and how long it remained on site, and even thank the customer for his or her business.
Ledieff says the GPS system keeps his drivers honest about their labor hours and locations, but it also helps him acknowledge his best workers. "It's another way to recognize a driver when they're back late because they've been working hard," he says.[PAGEBREAK]
Shumate Mechanical, an HVAC company based in Duluth, Ga., needed to automate tasks, reduce overall costs and increase revenue. After looking at several systems, the company chose the MARCUS Mobile GPS solution from Roswell, Ga.-based Discrete Wireless. The system is presently implemented in 60 of the company's 220 fleet vehicles, according to Shumate's CIO, Frank Steinocher.
The MARCUS system tracks vehicles, idle time and drivers' arrival and departure times. The Web-based program provides the real-time status of vehicles, including current location, time en route and traffic status using a Google Maps interface, and the mobile version can be accessed from PDAs and smartphones.
Prior to using the system, Steinocher says the company relied on a service technician's word as proof of whether or not he was at a jobsite. "With the accountability of a GPS system in his truck, it all becomes moot," Steinocher says. "Now, when he says he's there, we know he's there. When he's not there, we know he's not there."
Steinocher estimates that service technicians had been able to add an average of one hour per shift to their timesheets, just by writing down that they arrived 15 minutes earlier or left 15 minutes later to a jobsite. By using the GPS system as an electronic timecard, he has reduced his payroll expenses by 12 percent.
Shumate also has reduced labor by 10 percent and increased service revenue by 9 percent, because technicians and vehicles are used more efficiently. Steinocher says the increase in unused work hours has allowed the company to add an extra customer every four days or so, resulting in more business and more revenue.
Discrete's GPS system allows Shumate's fleet managers to see everything that happens in the field, but the company chooses to manage by exception rather than micromanaging its drivers. "You don't want to see everything that happens 100 times a day. You want to see those things that happen every now and then that cost you money," Steinocher says.
The success these fleets have achieved with their respective GPS tracking systems shows how technology can improve fleet operations and reduce payroll costs. However, the right approach to implementation will affect the success of the investment. Understanding human nature is vital.
"By and large, drivers tend to do the right thing," Donat says, "but they take liberties when they're not being called out on them."
Steinocher knew some drivers would grumble about the "Big Brother" aspect of GPS tracking, so he stressed the ability of the system to improve the working environment for both management and drivers.
"The GPS [system] had to have a purpose. It wasn't that we don't trust you," he recalls telling his drivers. "We're a family-owned operation. We built this establishment up from working elbow to elbow with ownership and people that have known each other for 20 years. The GPS [system] is utilized as a form of navigation, dispatching and equipment accountability. I know you're working as hard as I'm working, so let's work together to get the job done."