The assumptions that faster is better and “time is money” may turn out to be false — especially when it comes to benefits for anyone outside the executive suite.

photo © Darren Hester for openphoto.net (CC: Attribution-NonCommercial)

There are some assumptions in business nobody thinks to challenge. One of the commonest is that saving time means saving money. Benjamin Franklin seems to be to blame for the phrase “time is money.” It first appears in his book “Advice to a Young Tradesman” in 1748. Since then, it has become one of those automatic assumptions of the world of business. Perhaps it’s time to see what, if anything, it might mean today.

“Half our life is spent trying to find something to do with the time we have rushed through life trying to save.” (Will Rogers, in a letter to The New York Times, 1930)

When you save time, what exactly are you saving?

For a start, time cannot be saved. You can’t put it in a bottle to use later. You can’t pile it up, like a miser piling up gold coins, and gloat over your hoard. Time goes on at its own pace. You can spend less of it doing something. You can give up doing something and, in theory, make the time it would have taken available for something else. But you cannot, whatever you do, put that time aside and use it later.

So what are you saving?

Not effort, since it may take more effort — even more resources — to accomplish work in less time. If you set something aside to free time for other priorities, no time has been saved either. All you have done is change your priorities. And if you “save” time by cutting corners, what results may be of lesser quality; or you may increase the risk of error that will consume more time later to put it right. You can free-up time by cutting down on what you “waste” on worthless activities, but that too is setting better priorities, not saving those minutes or seconds in the way you can save money or water or anything else physical.

Does time really equate to money?

There seem to be only three situations where saving time and saving money equate — at least for a business. Firstly, if you can make or sell more goods in the same, or less, time, you might be able to increase your profit. Secondly, where employees are paid strictly for the time they work, taking less time means paying them less. Thirdly (and this is the most common of the three),an employer can hire people to work for a fixed amount of salary, regardless of time spent at work, then increase their actual working hours while paying them the same.

Let’s look at each of these possibilities.

Will doing more in less time increase profit?

It might, but several other factors are involved. You must first assume you can produce or sell faster with no increase in cost, or less increase than the returns on the extra goods. If you can’t, you’ve gained nothing except more output. If working faster costs you more — perhaps because of the capital cost of new machinery or processes — you’re going to be worse off.

Next, can you sell all that extra output at, or near, the price you did before? If demand doesn’t exceed supply before you start, adding to the supply will drive down the price — which is why the motor manufacturers have been busily closing plants and paying off their workers. More output without additional demand lowers prices and profits. Today’s companies often increase output first, then try to drive up demand to match it, which is truly putting the cart before the horse.

Can I cut people’s working hours and reduce cost?

The other situation where time equates to money is when employees are paid by the hour. The more hours they work, the more money they earn, and the more their employer must pay. On this basis, every employer in the land should be rushing to force hourly-paid workers to accept shorter hours.

Instead, we have an epidemic of overtime, which usually has a higher pay rate per hour as well. Why is this? Because the fixed costs of medical care and fringe benefits, which are paid per worker and not per hour, have escalated. It now pays employers to hire fewer workers, even if they must pay for longer working hours, rather than hire more people. Modern wage structures virtually guarantee continuing unemployment.

What about all those long hours for so-called knowledge workers?

“White collar” workers aren’t paid by the hour, but generally command more expensive fringe benefits; so the best way for companies to lower the costs of salaried employees has to be to hire as few as possible, then make them work long hours for no extra pay.

As long as these people aren’t paid for their extra working hours, “saving” their time is unimportant. All the extra time spent working is free to the employer. Of course, since you’ve laid as many people off as possible, to cut your fixed costs, the remaining ones have to do more work and work faster. Not to profit themselves, but to save their employer from having to take on more staff.

Who profits when you work faster?

However you look at it, doing more work in less time produces no benefit to employees, salaried or not. If they’re paid by the time they work, using less time equates to being paid less. If they’re paid a more or less fixed salary, doing more in less (or more) time makes them work harder for the same pay.

It all looks very different from the employer’s point of view. People who produce the same output in less time are indeed working harder, so the employer needs fewer of them. And as long as there are high fixed costs per employee, there’s an automatic incentive for the employer to encourage the process. The employer benefits for every time “saving” made. Even more if, as now, fear of unemployment lets employers also cut benefits and renege on pension benefits.

Fewer people, lower fixed costs, longer hours for the same pay. We’re turning the clock back to the bad old days of the Industrial Revolution. Only now it’s more likely to be well-paid, highly skilled professionals who slave away for 60 plus hours per week than unskilled people on minimum wage.

The Slow Leadership alternative

Slow Leaders ignore “saving” time because it can’t be saved. Do they ignore any link between time and money? No, that’s real enough.But they do question what’s being done with both.

People are working harder than ever and for longer hours, so someone’s getting rich on the extra profits. Sadly, we’re talking about two different groups of people: those who work faster and harder and those who reap any reward. Amassing money at the expense of other people’s quality of life is certainly an equation worth probing deeply.

What if you changed the saying from “time is (the employer’s) money” to “time is (everyone’s) quality of life?” I think that would make quite a difference to people’s willingness to go on accepting those longer hours. More time at work means less time for everything else in life.

So will you get ahead by saving time? As so often, the answer is a definite “maybe.” If you use better priorities and cut out things that waste time to no purpose, then use that freed-up time for something valuable, the answer could well be “yes.” If you work longer, faster, and harder to make money that you do not share in — or have no time left to enjoy — the answer must be “no.”

It’s your choice.

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