1. J Corp. and the Case of the Ghost Workers

2. Who is J Corp? ●J Corp. is a concrete construction contractor that operates across Texas and Oklahoma ●Founded in 1993, J Corp. has become a leader in concrete construction across Texas ●2013 revenue exceeded $100,000,000. ●700+ employees ●A privately held company ●Notable projects include: Bass Pro Shops (Grapevine), Cinemark Legacy Theater (Plano), Lockheed Martin Expansion (Ft. Worth), Comanche Peak Nuclear Power Station Expansion (Glen Rose), and hundreds more ●You have been in a building J Corp. has helped build ●J Corp. is not the company’s real name

3. What is happening at J Corp. ? Cash money is going down the toilet.

4. Superintendents claim “ghost workers” on their timesheets. ●A “ghost worker” is an employee a paycheck is cut for that doesn’t actually exist ●The money is instead put in the pockets of the superintendents Laughing all the way to the liquor store...

5. Estimated losses are substantial: ●Up to 4% of employees could be ghost workers. ●$1,877,750* lost per year *(700 employees X 4%)=28 ghost workers @ $14.50/hr($21.75/hr overtime)=($406X40hrs)+($609X35hrs)=$37,555/wk X 50wks/yr=$1,877,750/yr

6. Why do the ghost workers exist? ●Primarily because most DFW area construction companies offer profit sharing plans, J Corp. does not.* ●Also could be employee greed, feelings of substandard pay, etc. *Based on employee interviews, 2 years of direct employment and 18 years of company access.

7. How do we bust the ghosts?

8. Ghost-Busting strategies include: Fire guilty superintendents ●Can’t fire superintendents in the middle of projects ●More cost effective to pay “ghost workers” than to lose future contracts

9. Ghost-Busting strategies include: Initiate profit sharing ●Superintendents may still use ghost workers to accumulate even more money ●Doesn’t fix the immediate problem

10. Ghost-Busting strategies include: Have general superintendents hand out checks ●Lower wages may lead to superintendents leaving to work for competitors ●Effectively uses up ~20% of general superintendents working hours

11. Ghost-Busting strategies include: Using technology to pass out checks ●Issue RFID badges to workers ●Smartphone technology allows fingerprint worker identification ○ Ghosts don’t have fingerprints

12. RFID vs Fingerprint scanning RFIDFingerprint scanning ●~$1200 for badges, scanners, and software* ●~$1000 for scanners and software* ●Employees must keep track of badges ●Employees must keep track of fingers ●Possible to use badge and scanner without employee present ●Very difficult to use scanner without employee present *Based on 700 employees, 7 locations, $.80 per badge, $50 per RFID scanner, $100 per fingerprint scanner, ~$300 for software

13. A combination of strategies are used to form a solution Use general superintendents to personally hand out checks at job sites, while deploying a profit sharing program and investing in a fingerprint solution. ●Profit sharing keeps wages competitive and workers happy ●Controlled worker payments don’t provide the opportunity to use “ghost workers” ●Using fingerprint software will not use the general superintendent’s precious time ●Results in a cost savings of several orders of magnitude ($1,000 vs $1,877,750)

14. How did J Corp. react? ●Initially reluctant to use additional resources to handle wages (general superintendents) and pay more money for a profit sharing program and fingerprint solution ●Understood it was the most cost-effective and efficient solution in the long run ●Began immediately scoping a profit sharing program and looking at fingerprint technology solutions