The Hidden Costs of Unreturned Equipment: How Modern Asset Management Can Save Your Budget

Summary: Organizations struggle with the return of equipment from departing employees, leading to financial losses and logistical issues. Implementing a modern technology asset management solution like Oomnitza can help businesses better manage offboarding.

Key takeaways:

• Hidden Costs: Unreturned equipment from departing employees can result in significant hidden costs that many organizations fail to recognize until they implement a comprehensive asset management system.
• Impact of Turnover: High employee turnover rates combined with low recovery rates of company-issued devices can lead to substantial financial losses.
• Importance of Asset Management: Effective asset management solutions can help organizations track and recover their assets, leading to cost savings and better security management.

Many organizations face significant challenges when it comes to the return of equipment from departing employees, often resulting in substantial financial losses and logistical complications. The reality is that many businesses underestimate the scale of the problem, only realizing its impact when deploying a modern technology asset management solution.

One major issue is the hidden cost associated with unreturned equipment. The scale of departing employees not returning their company-issued devices is often not well understood due to a lack of data.

As one former CIO pointed out, before deploying modern technology asset management, they thought their recovery rate was much higher than it actually was. The financial loss is then amplified by the turnover rate. In many cases we discovered unknown and unmanaged assets to an extent that requires an accounting adjustment that impacts forecast. That unfortunately commands the attention of senior management and the importance of effective asset management.

For instance, a company may anticipate a 20% employee turnover rate for the year. However, if it turns out to be double that at 40%, while the device recovery rate from ex-employees is only 50%, the costs can spiral out of control. To put it into perspective, if we’re talking about a single $1,000 laptop, many in the organization may not care whether it’s recovered or not. But if you have 250 of these laptops, not near their end of life, walking out the door with ex-employees, you’re now talking about $250,000 worth of equipment that needs to be replaced, coming out of someone’s budget.

To further illustrate, a business line owner might say to IT in response to an equipment budget request, "I had 1,000 employees last year and 1,000 employees this year; why is IT hitting my budget with a $50,000 request for employee laptops?" The reason is a 10% turnover rate, and a 50% recovery rate meant 50 company-issued ex-employee laptops were not returned and needed to be replaced for new employees.

Furthermore, without a structured process in place, companies find it challenging to track and recover these assets. The departments that could be responsible for managing this—finance, HR, and legal—often deem it not worth the effort, especially when dealing with a large volume of unreturned items. The lack of accountability and clear processes exacerbates the problem, making it difficult to defend budget requests for replenishing lost assets.

Oomnitza’s modern technology asset management solution provides the data to spotlight the challenge, along with pre-built workflows to help improve recovery and more effectively manage the recovery of ex-employee assets. By offering automation capabilities and integration with existing systems, Oomnitza enables organizations to systematically address unreturned equipment, reducing unnecessary costs and improving overall efficiency. As the importance of technology assets continues to grow, companies are now leveraging advanced technology solutions to reduce security and financial risk, and help ensure the sustainability of their operations.