The Car and Truck Fleet and Leasing Management Magazine

Beaumont Electric Cuts Costs with GPS Units

January 2007, by Phil Bolsta

Chad Beaumont was growing weary of playing detective. After observing a number of his electricians leaving job sites too early, the owner of Beaumont Electric Company, Inc., a Naples, Fla.-based electrical contractor, suspected a substantial number of employees were regularly turning in inflated timesheets.

When Beaumont, whose clients are exclusively general contractors and builders, investigated further, he found rampant abuse. “Whenever I’d stop by a site on a Saturday, I’d see people leaving at 1 p.m. but punching out at 3:30 p.m.,” he recalls. “During the week, some guys never punched out for their half-hour lunch, which cost me two-and-a-half hours of overtime per man every week. Other guys were more blatant, leaving at noon and saying they worked a full day.”

Beaumont was disappointed to discover that some of his key people were among the worst offenders. “I paid someone to follow one van for several days,” he says. “There were two people in the van. The foreman was putting down an extra 10 hours a week and his helper was claiming an extra six to seven hours a week.”

Worse yet, the unethical employees didn’t think their transgressions were a big deal. “One person I confronted was one of our better foreman, and he actually said, ‘Well, everybody’s doing it.’ I told him, ‘You’re supposed to be one of our lead people and setting an example!’ I couldn’t believe it. The more I looked for that kind of thing, the more I saw. I got tired of following people and catching them at it.”

Beaumont calculated that an extra two-and-a-half hours of overtime per week — a conservative estimate — cost him $75 per man per week, or $300 per month. If just 60 of his 200 electricians were fudging their timesheets, that meant Beaumont was shelling out $18,000 per month, or roughly $200,000 per year, in bogus pay.

If that weren’t bad enough, Beaumont figured he was also losing a bundle in fuel and maintenance costs due to unauthorized personal use of company vehicles at night and on weekends. “Somebody once told me they saw a Beaumont van at DisneyWorld, which is four hours away,” he says.

GPS System Tracks Vehicles
Determined to fix the problem, Beaumont wondered if it was possible to use his company’s Nextel phones as GPS (Global Positioning System) devices. That option wasn’t available, but Beaumont’s Nextel rep hooked him up with a vendor that sold GPS devices produced by @Road, a fleet management services provider in Fremont, Calif. Beaumont learned that installing the devices in company trucks would enable him to track the vehicle locations on a map and monitor how fast his employees were driving. {+PAGEBREAK+} The satellite-powered GPS device registers every time the vehicle is turned on or off. While running, it checks and records the vehicle’s position (including street address), speed, and mileage every eight to 10 minutes. The device is also tamper-proof. At the time of installation, it’s covered with a brightly colored silicone-type putty, which breaks apart if tampered. Impressed, Beaumont installed @Road GPS devices in 10 of his trucks as a pilot program in April 2001. As if by magic, the phony overtime hours and unauthorized personal use disappeared. “We did have one recurring problem,” Beaumont acknowledges. “The drivers of those 10 trucks would come to me and say, ‘This isn’t fair! I’m staying until 3:30 p.m. and everyone else is leaving at noon. They’re getting away with it, but I can’t say anything because I’ll be a rat. You have to put GPS in all the trucks to be fair.’”

Payoff in Time and Fuel Savings
Beaumont agreed, adding the @Road units to the other 45 employee-assigned trucks eight months later. The payoff was huge. Not only did the company save tens of thousands of dollars by eliminating fraudulent overtime hours, it also avoided excess fuel costs that, at today’s gas prices, would exceed $2,000 a month. Beaumont Electric’s fuel usage during the first four months of 2002 was 4,268 gallons per month. Compared to 2001’s average use of 5,053 gallons per month — an amount that would’ve been even higher if not for the April pilot program —785 gallons of fuel per month were saved.

Today, many weeks go by without a single discrepancy between the GPS reports and employee timesheets. And when employees are caught red-handed, they are quick to ’fess up. “If someone leaves at noon and puts down a full eight hours on the timesheet, I’ll call him in and ask what happened,” Beaumont says. “He’ll usually say something like, ‘Oh, yeah, I had a dentist’s appointment and forgot. You can dock me next week.’ ”

As far as Beaumont is concerned, GPS is an acronym for Gas and Payroll Savings. The GPS reports are not only crossreferenced against employee timesheets (which takes his receptionist 16 hours a week), they’re also checked against monthly employee fuel card reports.

“Each van is assigned its own credit card, and each driver has an ID number,” Beaumont explains. “I remember one case where a fuel card was used only to find out that the van it belonged to was parked 15 miles away from the filling station at the time. The employee had used the card to put fuel in his boat. Thanks to the GPS units, we have very little abuse now. When we do catch someone filling up a personal vehicle, he’ll say he didn’t have any cash at the time, and to just take it out of his next check. My guess is that most wouldn’t have made good on it if I hadn’t called them on it.”

Driver Speeding Curtailed
The benefits of the @Road units extend beyond the financial realm. “We generate a quick report that shows the highest mph attained for each vehicle every week,” Beaumont says. “If someone has been speeding excessively, I call the fellow in and talk to him about it. After three visits, I give him a warning letter. That report helps us in several ways. It helps keep down accidents, and it also helps fuel economy and maintenance.”

The GPS device also thwarts crime. “One of our pickup trucks was stolen by some teenagers one night,” Beaumont says. “When our employee discovered it was gone the next morning at 6:30 a.m., our system showed it was on a dirt road not far away. When we went to retrieve the truck, we saw that our name had been spray-painted over. Even so, we had it back in our employee’s driveway by 8 a.m.”

The monthly fee for each @Road unit is a small price to pay for such big savings, according to Beaumont. “Saving just one man-hour of overtime per month pays for the overhead of a GPS unit,” he points out.

Is Beaumont’s GPS program foolproof? Not quite, although the consequences are minimal. “I passed by an employee’s house at 4:30 p.m. one day,” Beaumont recalls. “I watched him take a drill and other equipment out of the van and put them in his own vehicle. Before I put GPS units in, a guy would do a side job with my van and my tools and I wouldn’t know about it. They still use the tools, but they’re using their own vehicles now so at least I’m saving the gas and wear and tear.”

Even more important is the reduction of emotional wear and tear on Beaumont himself. “The GPS units save a lot of my time and aggravation,” he explains. “Very few people over-report anymore so I don’t have to worry about 55 trucks with two guys in each truck lying on their timesheets. That doesn’t mean that they can’t just sit in their truck at 3 p.m. listening to the radio. But at least I know where they are.”

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