January 18, 2022 | By Brandon Hartsaw
Believe it or not, your business may be shedding tens (possibly hundreds) of thousands of dollars due to poor time and attendance recordkeeping. That’s not a joke. According to the APA, 75 percent of businesses lose money from “buddy punching” (i.e., employees “punching in” for other employees). And 49 percent of employees downright admit to time theft, which costs US businesses a whopping $11 billion per year.
But that’s not the worst of it.
Nearly 40 percent of employees still use manual punch cards or paper timesheets. And every one of those archaic, messy, and outdated punch cards introduces an entire ecosystem of challenges (e.g., financial, legal, productivity, etc.) to your company.
So, what do you do?
Manual time tracking isn’t exactly “easy,” and attendance recordkeeping is filled with complex rules and regulations. Navigating time and attendance records can be a waking nightmare for a small-to-medium-sized business.
Luckily, there’s a way out. You can completely retool your time and attendance environment with the right technology. But be wary; not all time and attendance tracking software is built with you in mind.
Manual, paper-based time and attendance tracking is error-prone, time-consuming, expensive, inaccurate, and filled with regulatory landmines. So, businesses looking to escape the rut turn towards software-based solutions. Time and attendance systems are solutions built to help companies track, store, and optimize employee hours. Sounds simple, right? Here’s the problem: plenty of subpar time and attendance systems are on the market.
You should look for time and attendance systems with state-of-the-art capabilities, like biometric sign-ins (to prevent “buddy punching”), geo-fencing (to minimize time theft), and mobile-friendliness (to increase ease-of-use). Ideally, you want this software to be cloud-based. Not only do cloud-based systems have robust, enterprise-grade security with tons of built-in failsafes, but they automatically help you stay compliant with regulatory requirements.
Let’s talk about the carrot. Automated time and attendance solutions deliver serious value to business owners ready to embrace next-gen HR solutions. And this value comes across multiple layers. Here are five ways automated time and attendance solutions can transform your business.
As a business, you want to cut costs, stay lean, and reduce unnecessary spend. And labor presents a significant source of costs. Luckily, smart scheduling can reduce labor costs by 12 percent. But before you can create dynamic, needs-based schedules, you need to understand the full extent of your attendance. Best-in-class automated time and attendance records provide real-time reports, making it incredibly easy to demystify your labor ecosystem.
Manual timesheets are prone to errors. The typical error rate for manual data entry is between 1 and 2 percent, and roughly 8 percent of manually-processed payrolls contain errors. That’s a problem, a big one. Half of your employees will begin searching for a new job after two small payroll errors. And every payroll error also introduces compliance and regulatory issues.
Automated time and attendance management systems keep track of time cards with near-perfect accuracy. That means less time dealing with errors and more time focusing on what really matters — growing your business.
For most companies, payroll processing is a serious nightmare. In fact, the average small business owner will spend around 5 hours (per pay period) dealing with payroll taxes alone. When you include all the calculations and preparation, payroll processing represents a significant source of time waste for small business owners. Automated time and attendance software can reduce payroll time by 60 to 80 percent.
You work hard on your schedule. You maximize every hour, ensure labor costs meet certain standards, and ensure that your customers get prompt and adequate assistance when and where they need it most. So, what happens when employees pad their timesheets or take an early (and extra-long) lunch break? It’s not rare. An independent study by the Economic Policy Institute suggests that around 1/2 of employees regularly commit time theft.
Sure. An employee arriving 10 minutes late (8:10 a.m.) and quietly putting 8:00 a.m. on his timesheet may not seem like much. After all, it’s 10 minutes out of 8 hours worked. But that’s equivalent to over 43 hours over the course of a year. And that adds up fast.
Intelligent time and attendance tracking systems come with geo-tracking software. This allows the time tracking system to ensure that employees are on-premise before clocking in, and it allows you to track any extra-late lunches or sneaky breaks.
Eighty-six percent of business owners are unaware that The Fair Labor Standards Act has specific timesheet storage requirements. So far, we’ve discussed minimizing employee time theft. But what about eliminating accidental overtime issues?
That’s how much money the US Department of Labor has collected from businesses due to overtime violations.
Worse yet, FLSA wage and hour lawsuits are up by a shocking 417 percent. The government can sue you, your employee can sue you, and your local state agencies can throw fines at you for violating overtime laws. Your automated time tracking system accurately tracks time and prevents any overtime issues from costing you significant amounts of money.
Time and attendance is a serious challenge for most small business owners. You want to create hyper-productive, profitable workplaces — not spend hours grappling with regulatory jargon and confusing timesheets. The easiest way to handle time and attendance is to work with an HR outsourcing company capable of leveraging best-in-class software and industry-leading solutions. Not only can an outsourced HR partner tackle time and attendance, but they’ll also take care of benefits administration, payroll processing, taxes, and other complicated and time-consuming HR tasks.
Acting as the Chief Operations Officer, Brandon actively promotes an environment of creativity, collaboration, and individual ownership to empower Questco team members to deliver exceptional client experiences.