Do You Need New Time and Attendance Software?
If you are still using paper timesheets or a traditional punch time clock, your business will benefit from a digital time and attendance system. First off, it reduces the chances of time-related errors with your payroll. Most of these systems integrate with payroll services by uploading the timesheet data into your payroll program. No one has to calculate time punches manually and re-enter them into the payroll software – a process that's more likely to result in errors.
Time and attendance systems allow businesses to create electronic schedules, manage PTO and store employees' schedules, work hours, break time, time off, overtime and paid hours in one place. That means you'll no longer need to dig for data in paper files when an employee or your payroll provider has a question.
How Do You Evaluate Time and Attendance ROI?
You may pay $1 to $10 per employee per month for a time and attendance system, but the savings you get in return can far outweigh the cost.
According to Sierra Workforce Solutions, one way businesses can save money by using a digital time and attendance system is by eliminating inaccurate clock-in and clock-out times. For example, with manual timekeeping, an employee might round up their time out from 4:50 p.m. to 5 p.m. or round down their lunch break from 40 minutes to 30 minutes. Time and attendance systems eliminate this type of punch rounding and ensure that employees are paid only for the time they actually work.
You'll also save money by
- reducing the paid hours that managers, admins or HR staff spend in gathering and calculating timecards and
- by decreasing manual data entry errors that result in time spent fixing payments.
To determine the return on investment, Sierra calculated the time spent adding up timecards (using a previous study's results of six minutes per card) plus the savings in time theft (according to the previous study's results, the average employee steals over four hours per week) plus human error mistakes, which it estimates to be 0.25%. With these numbers, Sierra estimated that a business with 100 employees would save nearly $5,000 per month or close to $60,000 per year. You can see more details on the calculations here.
You will also reduce the risk of labor-law fines and back pay, which are common if employee time isn't calculated and paid correctly.
What Should You Expect Time and Attendance Systems to Do?
You should expect your time and attendance system to handle your hourly and salaried employees' time-tracking needs, including overtime.
At the very least, look for a timekeeping solution that offers multiple ways to clock in and out, gives remote workers the ability to punch in and out from wherever they are and integrates with the payroll software you use. Other useful features include the ability to generate and assign employee schedules, manage PTO tracking and approvals, log how long employees work on specific projects, and monitor the locations your remote employees are clocking in and out from each day.
How Does an Employee Time Clock Work?
An employee time clock provides a record of when an employee is working. For traditional punch clocks, an employee takes a paper timecard and inserts it into the time clock machine, and it records on the card what time the employee clocked in or out.
Digital time clocks (computers, kiosks and mobile devices) record the time directly in the time and attendance software, using a secure method to avoid time theft. Examples are a login ID, PIN, swipe card or biometrics (such as fingerprint, photo or facial scans).
To What Extent Is Employee Time Tracking Integrated With Payroll and HR?
Employee time tracking is an input for payroll, especially for employees who are paid by the hour. To properly pay your workers, you need to know how many hours they work each day, week and pay period.
The best time and attendance systems integrate with your payroll and HR software either by uploading a CSV file or automatically transferring timesheet data into your payroll and HR software through a digital interface. This saves time and cuts down on errors while transferring work hours from one program to another.
Why Is It Important to Clock in and out at Work?
The biggest benefit of having employees clock in and out is to ensure you are paying employees for all hours worked, per federal and state labor laws. Plus, you don't want to be paying employees for time they aren't working. A digital time and attendance system gives employers precise details on when employees are working and when they aren't.
Using a biometric time clock, which makes employees punch in and out with a fingerprint or retinal scan, also prevents buddy punching – in other words, it ensures employees clock in themselves rather than having someone else do it for them. If not curbed, buddy punching can cost your business money and reduce productivity and morale.
Accurate timekeeping also gives employers a better handle on staffing. With time and attendance software, you can compare employees' schedules with the busiest days and times for your business, and adjust staffing levels accordingly.
How Are Time and Attendance Managed With a PEO?
As a co-employer, a professional employer organization (PEO) will require you to manage employee time and attendance per labor law. They'll likely provide a time and attendance app that lives on the same platform as other HR functions, like payroll and benefits administration.
For example, when an employee records their time for the day, that data automatically populates in the software, thus saving you from duplicate data entry that could lead to payroll errors. This ensures employees are paid correctly each pay period.
Why Is It Important to Document Employee Time and Attendance?
A time and attendance system can help employers save money, improve team productivity and aid in legal compliance, because time records serve as a legal document and must be kept for a minimum of two years in most states.
Having an accurate log of when employees are – and aren't – working ensures that each staff member is on-site when they're supposed to be and that they're being paid only for the hours they work. Having a record of the hours employees have worked helps employers manage their staffing levels optimally so they are not under- or overstaffed.
Time and attendance reports can also serve as proof that employers are following the appropriate employment and labor laws – for example, adhering to youth attendance laws, paying overtime, and tracking required paid rest breaks and unpaid meal breaks.
What Is a Reasonable Attendance Policy?
Some organizations need strict attendance policies to function properly, while others may offer flexible work schedules. Most employers require workers to call in when they are going to be late or miss work. Many document each tardy occurrence, and some terminate employees who fail to show up for work after one, two or three days.
According to the U.S. Bureau of Labor Statistics, the average full-time worker misses almost three days per year. In some industries, such as service occupations, the absence rate is higher. When drafting your company's attendance policy, consider your industry and your company culture, as well as the demands of the business.
For example, one employer may find it acceptable for an office worker to be 30 minutes late to their shift, because there is flexibility in when they work. A manufacturer or retailer, on the other hand, may not tolerate such tardiness or an unauthorized absence because it may affect the business's ability to function.
Once you've created your company's attendance policy, you should meet with your employees to review the policy and ensure workers understand what is expected of them.
Tip: Before comparing time and attendance systems, identify which features you need. Some companies offer all these features bundled together, whereas others offer them on an a la carte basis.
Did you know? When being done manually, it can take as long as six or seven minutes to add up each employee's timecard.
