In 2017 we're seeing solar roofs and self-driving cars and still many businesses are tracking time and attendance manually. We're not judging; it definitely works for some people. But here's the simple reality: what you gain in comfort and familiarity you lose in efficiency.
For example, have you ever considered how much money you're losing due to inefficiencies from your time and attendance process? What about how much time you're wasting and what that's worth to you and your business? This post will examine some of the most common downsides of manual time and attendance tracking.
No person, product, or process is perfect. Everything has upsides and downsides.
We can't stress this enough. Tracking time and attendance (and then applying that to payroll) manually isn't "bad" or "wrong."
Upside: It's comfortable and convenient.
You're used to it. You don't have to think too hard about it. In fact, you know it like the back of your hand. That is definitely an upside.
An automated time and attendance system isn't a guarantee of perfect efficiency, but it's a start. If your employees are still filling out time cards, it could be costing your business a lot more than just the cards themselves. When you consider the downsides of manual timekeeping, you begin to appreciate just how much such a system could save you (and how it might actually more than pay for itself).
Downside: Supervisors are spending too much time approving timesheets.
Business in 2017 is all about efficiency. If you can't do it cheaper or faster (or dramatically better) your customer can easily find someone else who can using a device that fits in his pocket. Everyone in your organization's time is valuable - especially your supervisors. The more time you force them to spend reviewing and approving timesheets is more time they aren't focused on customer service or revenue-producing activities.
Downside: Employees don't always log their true time worked.
The national average of wasted time is 7 minutes per day per employee. Let's do some math. Say you have 5 employees and you pay each of them $12 per hour. On average, one employee will waste 29.16 hours per year. At their pay rate that costs you $350 per year. Apply that to all 5 employees and you're looking at $1,750 that should've remained in your pocket each year. $3,500 for 10 employees and $7,000 for 20 employees. And that's just the average employee.
Downside: Hand-keying numbers leads to errors (or fraud).
This is pretty simple. Humans are humans. Which means sometimes, even if they're really great and it's really rare - they make errors. It's going to happen. Those errors could mean you're paying someone too much or too little. And it puts you at risk of fines and having to spend lot's of time correcting those errors.
Downside: Managing overtime is really, really hard.
A revision to the FLSA was introduced (and subsequently struck down, at least temporarily) in 2016 that would have more than doubled the mandatory overtime threshhold. Since then, New York has enacted it's own version of the federal overtime mandate. It's being phased in over several years and when fully implemented, all New York State businesses will have to track hours and pay overtime to any employee who's salary is less than $48,750. (And it's actually $58,500 for any employer in New York City, Nassau, Suffolk and Westchester Counties.) What this means is moving forward more and more businesses will be forced to track hours and manage overtime if they want to avoid being forced to pay time-and-a-half to a significant portion of their workforce.
Downside: You're exposed to audits and employee complaints.
The less automation surrounding your timekeeping procees creates more room for error. And the less (formal) documentation around it creates more questions to be raised by a variety of stakeholders.
Peek under the hood before you buy the car.
Before you start researching automated time and attendance systems and participating in webinars and demonstrations, use our Timekeeping Savings Calculator to help you understand the tangible benefits of upgrading your timekeeping procees. You just key in a couple of numbers and it spits out a real, accurate estimate of your savings. Click here or the image button below to check it out.
If you're a small business owner or HR Manager trying to wrap your head around the complex world of time and attendance, check out our comprehensive resource page, Time and Attendance - A Complete Guide. This page spells out literally everything you'd need to know about time and attendance, including timekeeping procedures, time clocks, employee scheduling, compliance considerations, emerging trends and a whole bunch more.
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