Today’s human resources professionals face a world of increasing government regulations and oversight, lawsuits from disgruntled employees, and the need to maximize workforce efficiency. In this environment, accurate tracking of employee time and attendance has become more important than ever. If you’re still performing this essential task with pencil and paper, you’re missing out on a golden opportunity to lower administrative costs and improve workforce efficiency. You’re also putting your bottom line at risk through potential fines and penalties resulting from incorrect time and attendance record keeping.
To respond to these challenges, smart companies are turning to technology to manage their time and attendance processes more effectively. Specifically, they are using sophisticated software programs streamline the process by automating everything from capturing employee time on the job to processing payroll, HR compliance and more. With the right automated system in place, today’s can companies enjoy a number of advantages that lower administrative costs while improving staff productivity. These include:
- Accurate capture of employee hours on the job
- Elimination of buddy punching and other forms of time theft
- Prevention of human error that occurs with manual bookkeeping
- Easily to keep employees informed of their time and attendance
- Improved compliance with state and federal regulations
- Creation of a central time and attendance database that can be used throughout the business
- Up to 5% lower payroll costs
When implementing a new software program, especially one that will impact most areas of the business, there’s a right way and a wrong way to do things. Adopting the following best practices before, during and after the implementation process will get your new system up and running quickly while producing the best return on your investment.
Best Practice #1: Make time and attendance a strategic priority
In today’s crowded markets, delivering the highest quality product at the lowest cost has become a top priority to ensure business success. Controlling costs starts with efficient management of your workforce, and time and attendance represents a key component of this strategic imperative.
Too often, companies consider time and attendance as little more than a tedious administrative task required to properly pay employees and comply with government regulations. In reality, it offers a wide variety of strategic benefits that can impact performance in many areas of your business. When viewed as a strategic initiative, the time and attendance process can enable your business to:
- Improve productivity by deploying personnel more efficiently
- Reduce labor costs by minimizing unnecessary overtime and over-staffing
- Relieve Human Resources and other managers of outdated manual processes
- Standardize time management processes throughout the company
- Provide managers with a structured, rules-based format for calculating gross pay and absence accruals
- Increase the quality of managerial decisions
- More effectively align employees to organizational needs
- Support the achievement of company-wide objectives
To reap these rewards, organizations need to raise time and attendance from a low-level HR activity to a strategic priority that is regularly reviewed and evaluated by senior management. HR and other managers still perform the day-to-day collection and reporting of time and attendance data, but senior management takes an active role in setting goals and managing the results of this important area. In addition, IT needs to ensure that managers have the right hardware and software to support automatic time and attendance management.
Best Practice #2: Select the right system for your business
You can find a lot of good time and attendance software programs with a simple Google search. But finding the best one for your business requires diligent research. When evaluating different products, make sure the system:
- Comes from a reliable vendor. Find a vendor that has been around the block a few times. In other words, they have a track record of providing a quality product at a good price – and timely technical support. The last thing you want is to install a time and attendance system and have the vendor go out of business six months later. Make sure the technical support that is available when you need it, rather than when it’s convenient to the vendor. And always talk to actual product users before making your decision.
- Fits your work environment. Even the most sophisticated system can yield dismal results if it doesn’t match the way you work. For example, biometric systems that track time and attendance with employee fingerprints are currently gaining in popularity. However, they don’t work well in all environments, especially in companies where employees get their hands dirty or grimy. Or suppose you have a lot of “road warriors” on your sales team. A system that doesn’t allow for mobile clock-ins would not support the way your people do their jobs.
- Seamlessly integrates with your other business management systems. Automatically tracking time and attendance systems will certainly reduce administrative costs and improve efficiency – but it’s only half of the equation. The system should also have the ability to seamlessly integrate with your payroll, point-of-service, HR and other technology tools you use to manage the business. In particular, the system should enable you to format the data so it’s easy to electronically export to your payroll software or service.
- Provides customizable reporting capabilities. Time and attendance reporting allows you to make quick decisions regarding workforce deployment in the moment. More important, it enables you to take a long-term perspective to make better decisions about workforce size and utilization that can impact the future growth and profitability of your business. All systems offer their own standard reporting formats. To get the most value out of your system, look for one that offers the ability to customize formats to suit the way you want to see the data.
- Offers robust features and functionalities. Look for an attendance system that offers features and functionalities designed for the way people, not calendars, work. For example, the best time and attendance systems enable managers to see information by shift, hours, or job roles; review employee schedules by the day, week or month; sort the calendar by employee, position or department, and much more.
Equally important is having an integrated time clock that allows employees to clock in and out via the web, text message or mobile app. It should also offer drag-and-drop functionality, simple time-entry dialog boxes, and tabs that display detailed accrual balances so employees can see how much time they have worked and any benefits they have accrued.
Best Practice #3: Offer self-service to managers and employees
Today’s workforce is becoming more mobile than ever, and your time and attendance needs to keep up with this trend. Many employees still engage in traditional nine-to-five, in-the-office work schedules. However, a growing percentage of workers are on the road or in the field, working from home offices, coffee shops, airports and many other remote locations. To meet the needs of today’s mobile workforces, your time and attendance software should provide self-service access to managers and employees, including:
- Schedules, hours worked, and paid time off balances
- Productivity dashboards that display operational and attendance data
- Real-time alerts when employees fail to clock in on time
- Real-time alerts unscheduled employees clock in
- Real-time alerts when employees approach overtime
- Real-time alerts when employees go beyond mandated work limits
One of the most popular methods of self-service time and attendance is the use of fingerprint biometrics to verify employee identity. This method offers several important advantages to companies.
- Data accuracy. Fingerprinting is one of the most secure methods for tracking time and attendance. Unlike regular clock-in systems, it provides a unique and personalized way of determining employee identities. It also prevents common time-stealing practices such as buddy punching or sharing passwords. The result is highly accurate time and attendance data for managers and HR personnel.
- Improved internal security. In today’s world, sensitive company and customer information must be protected. Fingerprint time systems help protect information by ensuring that all employees log in for themselves. They also enable you to secure all entry points to the building so that unwanted visitors can’t enter under false pretenses.
- 24/7 access. Employees can clock in and out from anywhere at any time using a web browser on their phones and mobile devices.
- Integration with other business systems. Most fingerprinting systems easily integrate with outside payroll providers and other business systems. They also help streamline the payroll process with easy exporting of data at the end of every pay period.
Best Practice #4: Move to the cloud
To streamline the time and attendance process, many companies are adopting systems that use cloud computing, also known as Software-as-a-Service (SaaS). This involves having a third-party service provider assist in the management of your time and attendance process by providing a system for hosting, organizing, storing and backing up your data. You get all the advantages of a sophisticated time and attendance system without all the headaches involved in managing it. Major advantages include:
- Reduce your IT budget. Cloud-based applications don’t require the time and expense of installing and configuring the hardware and software or maintaining them once the system is in place. They also don’t require a dedicated server because the software runs on the vendor’s server.
- Lower payroll costs. Even if you send your payroll data to an outside payroll processing company, it still requires a lot of time and expense to gather the data and format it for exporting to the payroll service. This is especially true if you still use manual processes to track time and attendance. Cloud-based time and attendance systems automate these processes, reducing administrative costs and making your payroll team more efficient.
- Faster, cheaper upgrades. When you purchase a time and attendance software, upgrades usually cost extra. They also involve the time and effort to install, test and get them running properly. Cloud-based software programs typically offer upgrades at no extra cost beyond the annual subscription. In addition, the upgrade is performed on the service provider’s server, so you don’t have to bother with it.
- Grow with your business. Over time, companies can easily outgrow the limitations of purchase software. With cloud-based time and attendance systems, you pay only for the capacity you need. The capacity to quickly and easily scale the system up or down is especially helpful for companies that have seasonal workforces or are experiencing fast growth.
With lower operating costs, fast implementation, improved productivity and lower total cost of ownership, it’s no wonder that so many companies are migrating to cloud-based time and attendance systems.
Best Practice #5: Automate compliance with regulation
If your business has to comply with government regulations regarding time and attendance, automatic tracking system can streamline the process while improving compliance. It can also help you comply with your company’s own internal policies, and the ability to accurately capture time and attendance data makes it easier to gather and organize information during government audits.
Best Practice #6: Improve key metrics
To use time and attendance software systems to their full benefit, it’s not enough just to capture the data more efficiently and accurately. You also need to use the data to set performance goals and track improvement in four key areas:
- Improve timesheet accuracy: aim for 0.5 (or better) error rate
- Reduce payroll errors: saves time and money, improves morale
- Improve paid time off accuracy: aim for 0.6 (or better) error rate
- Improve compliance scores: aim for 10% improvement between audits
Improvement in these areas yield numerous benefits, including lower labor costs, less administrative rework for HR staff and managers, and improved employee morale as they experience fewer mistakes in their paychecks and time off days or hours.
Ultimately, most companies embrace automatic time and attendance systems for the cost savings, improved staff productivity, security of the data, and ease of compliance with government regulations. However, these systems do more than just streamline the time and attendance process for HR personnel and department managers.
For example, automatic systems offer sophisticated financial insight to senior managers by providing an in-depth data on key performance metrics such as hours and wages, employee counts, and scheduled/working status. By accurately and efficiently tracking time and attendance, these systems enable C-level executives to make more informed decisions regarding job-costing, labor distribution, and hiring requirements. In addition, the real-time information afforded supervisors and mid-level managers enables them to more effectively manage workforce costs and productivity as well.
Automatic time and attendance systems can also improve employee morale. When manually performed, capturing time and attendance can be a tedious, frustrating and error-prone process for employees and managers alike. Removing these distractions enables people at all levels to become more productive by focusing more time on energy on the tasks they need to complete their jobs.
Overtime calculations can also be a source of frustration for managers and employees, especially when manually calculated. Employees want to earn more money, while managers are typically under pressure to minimize overtime to keep labor costs down. Tracking regular and overtime hours with an automated system reduces manual errors and provides a consistent level of accuracy that satisfies both front-line employees and managers. It is particularly useful for employees that earn different rates of pay for different types of work.
Finally, automated time and attendance systems can even offer Insurance benefits by providing a reliable tool for assessing insurance requirements, such as total hours worked by employees and other workforce data. For companies seeking dramatic improvements in their time and attendance processes, automated software systems offer a cost-effective solution that can positively impact many different areas of the business.