Each year, U.S. employers lose $11 billion to time theft. Much of this comes from employees stealing a few minutes each day, which can be prevented with a detailed time and attendance system.
Tracking employee time and attendance is often an overlooked business process. While it's not glamorous, it's important to keep track of when your employees are working. Your business wants to ensure maximum productivity, which means you want to prevent employees from lying about their attendance. In addition to a suitable time and attendance system for your needs, it's important to find the right timeclock for your business.
As the number of available time and attendance solutions grows yearly, there's no shortage of timeclock options for your business. You can select either a stand-alone timeclock or a time and attendance system that includes timeclock features. It depends largely on your business and what you feel makes the most sense for monitoring your employees.
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Selecting the right timeclock to prevent time theft also depends on the level of trust you have in your employees. Some businesses might not care if employees clock out at 4:55 each day and put 5 p.m. on the timesheet. Other businesses might cherish those five minutes of productivity each day. For those that want a general overview of when employees work, there are many simple timeclock solutions to ensure employees are working near their expected hours per week. For companies with stricter policies, more precise options like biometric timeclocks might be best.
Types of timeclocks
Here are some of the different types of timeclocks as well as their benefits and disadvantages.
The punch card is the original type of timeclock, and some businesses still use it. With these clocks, employees place their timecard into a clock and the time is stamped onto a card. A manager then manually records the timestamps into payroll. These stand-alone clocks do not connect to cloud-based time and attendance systems, so depending on your business's needs and your preferences, this may be a disadvantage.
These timeclocks work on a system of credentials an employee carries with them. This can be a badge card with a magnetic stripe they swipe to clock in. With barcode clocks, employees scan the card's barcode to record when they clock in and out. There are also readers that use RFID (radio-frequency identification), allowing users to tap their card or fob on or near the scanner.
Proximity cards are often used with RFID timeclocks. These cards can be read from up to 10 feet away in some cases, which allows employees to scan their cards more easily than if they were inserting a magnetic stripe into a timeclock to swipe in and out. Disadvantages of this type of timeclock include employees forgetting their credentials at home, losing their credentials or having them stolen. Also, some forms of credentials, such as magnetic stripes, wear out over time and need to be replaced. Proximity cards can help your timeclock avoid the wear and tear associated with magnetic stripes.
These clocks feature a number pad and employees enter a personal identification number (PIN) or personalized password when they arrive and leave each day. Many PIN clocks work with magnetic swipe or barcode cards for two-factor authentication. The problem arises when an employee either loses or forgets their credentials. There's also the potential for tampering, with employees asking co-workers to input their PIN for them when they arrive to work late or are not there.
Biometric timeclocks are most popular with businesses concerned about "buddy punching," which is when employees clock in or out for co-workers. According to data from TSheets, buddy punching costs U.S. employers $373 million annually. Biometric timeclocks usually rely on employee fingerprints, so there's little chance of fraud. Many of these timeclocks use USB fingerprint readers to scan employees into work. Biometric timeclocks and USB fingerprint readers are good for businesses with insufficient staff or technology to monitor the timeclocks.
As mentioned earlier, biometric timeclocks are ideal for limiting buddy punching. Businesses worried about time theft might lean toward biometric timeclocks. There are also more sophisticated options than fingerprint scanners, such as facial recognition or iris scanning. The main disadvantage to biometric timeclocks is the varying scanner quality. Cheaper models may not pick up the subject properly, resulting in false negatives. Fingerprint scanners need to be frequently cleaned to keep scans positive and to stay hygienic. When these timeclocks fail, it can be a hindrance to businesses, as the technology needs to be fixed or cleaned.
"It's pretty tough to circumvent these systems, but they also come with drawbacks, especially if they aren't super accurate or take your employees a few minutes to clock in and out," said Ravi Dehar, head of growth at Homebase.
Many employers today are ditching wall-mounted timeclocks in favor of having employees clock in and out with their computers or smartphones. With most time and attendance systems, employees record when they arrive and leave within the online system.
Plenty of payroll services, such as ADP, have mobile applications employees can download and then use to clock in and clock out. This is useful for employees who are remote and don't have access to the company's timeclock device. Apps include geofencing technology that records an employee's location when they punch in and out. This is also useful for retaining records. According to the Fair Labor Standards Act, each employer should retain at least three years of payroll records and at least two years of timecard data.
"The easiest way to store this is, of course, digitally," Dehar said. "As an added bonus, you'll get timecard edit history, so you can see who made what edits in the event someone files a labor complaint."
The potential downside of this easy-to-use and timesaving option is time theft. When employees submit their own daily time records online, it becomes easier to steal a few minutes each day. Again, some companies might not care if an employee punches out at 4:57 p.m. and calls it 5 p.m. if they're performing well. For those worried about a few minutes here and there, though, it might take a little extra effort to verify the time employees are putting into the job when they're using a mobile or online timeclock, especially if those workers are remote.
Interactive voice response allows employees to punch in and out over the phone. Workers call a predetermined number and follow several prompts to record their times. These types of systems are still available but have become outmoded with smartphone mobile applications.
If you pick a biometric clock or one that works with employee badge cards, you should choose one that operates in an offline mode for the power-saving capabilities.
Kiosk modes on tablets
Businesses can repurpose mobile devices, such as tablets, as timeclocks to save money. There are many applications that allow you to run tablets – both Android and iPads – in kiosk mode, which restricts them to single-application use.
Only the device's admin can unlock the iPad to return it to its normal settings, so you can mount it near the office's entrance and have it only run your timeclock application. If you're looking for the simplest solution, this can be a good choice.
In case your business uses a timeclock system and an access control system, there are some products that do both. Pairing access control with time and attendance lets your employees accomplish both with one action. When an employee uses their key card, password or biometric scan to enter a building, the system can log this time and use it as a timestamp.
You can also require an anti-passback control system, which requires employees to use credentials to exit a building. This serves as their clock-out. The system is often paired with a stand-alone timeclock that's used for breaks.
If you're interested in learning more about time and attendance systems, check out our time and attendance buying guide. If you know what you're looking for, visit our best picks page and see which ones we recommend, along with a complete list of systems that may work for you.
Additional reporting by Saige Driver.