The Money Value of Time

The National Audit Office building, built orig...
The National Audit Office building, built originally as the Imperial Airways Empire Terminal. The statue, “Speed Wings over the World” is by Eric Broadbent” (Photo credit: Wikipedia)

According to page 2 of today’s UK Financial Times, a UK National Audit Office report shows over 6.5m people waited more than 10 minutes to get their calls answered by HMRC, adding £33m to customer’s phone bills and wasting £103m of their time last year.

This snippet of information triggered a few things that I wanted to say to you this morning. The first of these is, that, despite the fact that it is obviously pretty dire that people need to wait so long to get their calls answered by the service they are paying taxes to fund in the first place, at least in the UK there is a body which is concerened at the loss of time and places a value, in monetary terms, on that loss of time by the customer.

Anyone who has spent any time either in government offices, or even banks or supermarkets in this part of the world will probably confirm that the idea that the customer’s time is valuable and should be respected is a rather alien concept. Not so long ago it was an utterly alien concept, but even today it is still a concept which they find rather hard to grasp.

Not as bad as China, though, from what I heard and also saw. People being expected to queue all day outside the Chinese consulate for their visa and then at the very moment that the scheduled closing time of the office came the shutters come down like with Kiosk Keith and that was that. The spare time of the employees was utterly sacrosanct, that of the customer not at all. This of course shows an elitist mentality, which can be found in almost all state sector offices to one or another degree anywhere in the world. Expect it and try somehow to deal with it.

Much less acceptable is the wasting of the customer’s time in business. If the customer is paying then they have a right to have their matters expedited and people who keep people waiting ought either to invest in more infrastructure to avoid it or to wonder if they are in the right business. How much waiting is acceptable of course differs from one branch to another, and from one way of calling in to another. One cannot be too annoyed if one’s email is answered after 24 hours, but one would be rather annoyed to be kept waiting even 24 minutes on the telephone, and yet this has happened to me on several occasions even when buying goods and services from the private sector.

Businesses in East and Central Europe have learned a lot, especially recently, about the time value of money. What we seem to be forgetting is that there is also a money value of time. That’s intrinsic of course to the idea of employment – a person gives up their time in exchange for money. But when it comes to other things in life, we’re expected to spend our time and not get anything for it. Watching adverts on TV when we are also paying a licence fee, that’s one example, queuing up in shops is another, waiting in line at the passport office, that’s another. The most people seem willing to do is to sweeten the experience by putting out comfy chairs and a vending machine, or reducing the stress of queuing by a ticket system, but these are mere palliatives and do not address the issue of customer time wastage. The best thing of course is to reduce the time your customer has to wait, rather than make the waiting more bearable. He or she is still not where they want to be even if they are engrossed in Angry Birds and drinking your coffee.

The first way to get an angle on it is to measure it of course and then value it, and track that value over time as you introduce time wastage reducing measures. It’s in the valuing of lost time that the findings of the UK National Audit Office are quite useful for us also, in the private sector, but it does seem to raise more questions than it answers. They have found that more than 10 minutes of 6.5 million people is worth 103 million GBP of time. What “more than ten minutes” means in calculation terms is not clear, but let’s assume that they waited on average ten minutes more than they would reasonably have expected to wait, and under that assumption we have about one million hours being valued at 103 million pounds, and therefore they seem to be valuing the time of the average Joe to be at least 100 EUR per hour. This is very generous of them, given that the minimum wage is much much lower than this. Perhaps they are thinking of their charge-out rates, rather than what these phoning-in people are actually earning.

Anyway, time for a poll. Thinking about what you earn, and your preference for not hanging on telephones waiting for answers, what would you say a fair money value of one hour of your wasted time spent at a tax office, bringing back faulty goods to a shop or time wasted without your consent at another place should be?

Your thoughts welcome, go ahead:

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