5 Efficient Ways to Record Employee Time

13 Jun 5 Efficient Ways to Record Employee Time

Tracking employee time is an essential task for all organizations with hourly workers. The hours worked determine how much each employee gets paid. But while tracking time is a must, there are multiple ways to record and calculate hours. In this article, we’ll explore five effective automated time collection methods. Modern time tracking systems are better than manual methods that include paper timesheets, old-fashioned punch card clocks and spreadsheets. If you are a small business owner, consider which time collection system is best suited to meet your time and labor needs.

First, a short explanation of each method. We’ll take a deeper dive ahead.

1. Mobile App: The employee uses a mobile device to punch in and out for shifts in a timekeeping application.
2. Geofencing: Geofencing is a feature of a mobile app. It verifies the location of mobile employee punches with GPS.
3. Web Punch: The employee enters punches in a web portal using a laptop or desktop computer.
4. Fixed Hardware Clock: A physical device that uses a punch card, proximity card or fob, or keypad entry to track employee punches.
5. Biometric Time Clock: A hardware device that uses a unique physical attribute such as a fingerprint or facial scan to identify employees and record shift clocking times.

Each of these methods integrates with specialized employee time and labor software. The complete system provides the highest level of modern payroll management for businesses of all sizes.

Why is Manual Time Tracking a Liability for Modern Businesses?

Now, let’s talk about why these punching processes are better than traditional methods like paper timecards and spreadsheets.

Payroll Errors: Research has found that manual timekeeping can account for a 1% – 8% payroll error rate. Let’s do the math in a scenario where the errors are not in your favor. Even on the lower end, say 2%, that would be $240 extra on a $12,000 payroll – $5,760 annually if you run payroll twice a month.

Additionally, consider the effect of payroll errors on employee morale. Since the number one reason your employees come to work is to get a paycheck, it’s not surprising that payroll problems are a major frustration. In fact, one survey found that after two paycheck errors, half of participants said they would consider looking for another employer. Employee frustration is not the only problem with payroll errors, inaccuracy also increases the risk of a compliance violation, which leads us to the next section…

Compliance Risks: Because of the errors inherent in manual timekeeping, it increases the risk of multiple types of compliance violations. Let’s take overtime, for instance. With manual timekeeping, overtime pay could be based on an undercount of hours. If an employee clocked in late, made math errors on their timecard, or the payroll manager mis-keyed a number in a spreadsheet, the employee could be shorted overtime wages.

Similarly, if an employer undercounts hours for a minimum wage employee, that employer ends up committing a minimum wage violation. Stable scheduling, meals/breaks, tip management, and medical leave compliance also depend on accurate tracking. Furthermore, there is a recordkeeping component to every wage and hour law. Clearly, inaccurate time collection throws a wrench into payroll recordkeeping compliance.

Wasted Labor: Manual time tracking could be called wasted time tracking. With paper timecards, employees need to write down their shift start and end times, tally them up at the end of the pay period and submit them to their managers. This averages 15 minutes per week per employee. Managers have to collect timecards, check the calculations, fix any mistakes, and submit to payroll. The payroll manager spends an average of seven minutes per timecard to get the data into the payroll system. Now, you might be thinking that some of these tasks only take a few minutes. That might be true, but these minutes add up and take away from time that could be spent on revenue-generating activities.

Time Theft: Regardless of the industry, many employees commit hours fraud to pad their paycheck. The methods employees use to steal time include clocking in earlier or clocking out later than authorized, failing to clock out for unpaid breaks, fudging on their timecard, or brazenly having a co-worker clock in for them when they are late, or absent altogether.

Lack of Insight: It’s difficult to optimize labor resources with manual timekeeping. Managers don’t have tools to prevent unplanned overtime, plan shift schedules, or allocate employee hours to projects or clients. However, employee timekeeping software does all these things and more. For example, they track employee certifications, multiple pay rates, shift differentials, PTO, and medical leave.

Increased Labor Costs: All of the problems we’ve discussed thus far increase labor costs in one way or another. Errors, time theft, wasted labor hours, and unplanned overtime have an immediate and direct impact on your labor budget. Consider that a Department of Labor investigation, employee legal challenge or compliance violation can be extremely expensive in the long run. As mentioned previously, payroll errors can also lower engagement which can cost you in decreased productivity. Worst case, they can increase employee turnover which results in higher recruiting costs and decreased team performance due to lower collective team expertise and lost institutional knowledge.

As we’ve established, time tracking is critical to business success. When you improve employee time collection, the benefits extend beyond HR to all teams and business functions.

4 Key Findings About Employee Time Tracking for Small Business

1. $7.4 billion is lost per day to unrecorded work activities. (FinancesOnline)
2. 43% of hourly workers admit to exaggerating the amount of time they work during their shifts. (SoftwareAdvice)
3. With manual time tracking, employees who log their time at least once a day are 66% accurate, whereas people who log their time weekly are only 47% accurate, and those who complete their timesheet less than once a week are only 35% accurate. (Accelo)
4. The average cost of labor every time an employee fills out a timecard is $9.37. For a company with 100 employees, that’s $937 in employee time every pay period. (EY)

5 Efficient Ways to Record Employee Time

Now, let’s discuss the benefits of each punching method from both an employee and employer perspective.

1. Mobile Punching:  With mobile employee time tracking, employees use an app on a mobile device to punch in and out for shifts. This is a popular method for field service, sales, home health, delivery and other businesses with employees that travel throughout the day. Modern mobile time tracking apps have intelligent clock features which are a form of Artificial Intelligence (AI). This means they present only logical clocking options based on the employee’s status (punch in, punch out, punch out for break, punch in for break). In addition, they can track mileage, manage tips, and tie employee work time to jobs or projects. Employers can customize clock prompts to collect any type of information they need to manage projects and teams effectively. There is no better efficiency tool for businesses with hourly mobile employees.

Employer Benefits

• Intelligent clock features reduce errors and help maintain compliance.
• Managers can review timecards and schedules from anywhere.
• Employees submit more accurate records because the app calculates hours, PTO, overtime and leave.
• Automation takes the work out of collecting data and delivering to your payroll provider.
• Mobile helps reduce employee time theft by ensuring that only the employee can punch in under their own name.
• With employee self-service, the HR team and manager receives fewer calls from employees seeking basic information like schedules and PTO balances.
• Using employees’ personal devices for shift clocking can be more cost effective.

Employee Benefits

• Employees can track their time from wherever they are, whether working at a remote worksite or on the road.
• Intelligent clock features ensure that employees punch the right buttons to reduce errors and eliminate complexity.
• Everyone has a mobile device, so this is convenient for employees, which makes it easy to maintain consistent records and leverage powerful timekeeping software.
• Employees have 24/7 access to schedules, timecards, PTO balances, open shifts and other information.

If you have mobile employees and need a convenient, accurate and cost-effective way to track their work time at any location, contact Payroll Partners.

2. Web Punch:  Cloud-based time and labor software has transformed workforce management, including employee time collection. Web punch allows the employee to clock in directly to timekeeping software from any internet-connected device. This method is ideal for employees who work on a computer because they don’t need to make a trip to a hardware clock or timecard rack before they start their shift. It is used in many work environments including call centers, healthcare facilities, restaurants, retail establishments, and professional services. Gig workers, freelancers and independent contractors use web punch to allocate billable time to clients and projects.  Let’s outline key benefits for both the employer and employee.

Employer Benefits

• Intelligent clock features provide contextual options, reducing complexity, eliminating errors, and making time data more accurate.
• Intelligent clock features allow for higher compliance standards with special meal and break tracking as well as clock prompts for job codes, certifications, tips, or other needs that can be custom programmed.
• Clock lockout helps reduce unplanned overtime by restricting access to punch in until the time employees are expected to work.
• Web clock is included free with TimeWorksPlus and is a great way to save money while tracking time.
• Employers get a notification when employees miss a punch, so mistakes can be corrected immediately – while punch times are fresh in everyone’s memory.

Employee Benefits

• Employees can punch in from their computer by opening a browser, logging in and punching.
• The software presents logical clocking options which reduces errors and helps ensure all work time is recorded.
• The software manages PTO, breaks/meals, FMLA and other time categories automatically.
• Easy and convenient to track time for employees working remotely or at a job site without a physical time clock.
• Because employees can verify their hours after every shift, and the system does the calculations, inaccurate paychecks are a rarity.
• The software stores time data in a secure system.

If you have hourly workers and need an affordable and straightforward way to track hours for payroll, contact Payroll Partners.

3. Geofencing:  Geofencing is a GPS-enabled capability with limitless applications. For our purposes here, we’ll describe how it’s used in mobile timekeeping apps. A geofence is a radius around a GPS location. As the name suggests, it uses GPS to record the physical location of mobile employee punching. The manager can create a geofence for each employee punch location. When workers punch in, the manager can see their location relative to the geofence. Managers can also set up alerts for out-of-bounds punches.Many types of businesses are discovering the benefits of mobile punch with GPS. Field service, home healthcare, construction, event catering, and food trucks use geofencing to collect shift punches relative to employee location.

Employer Benefits

• Helps ensure that employees are punching in at the job site or at a specific location.
• Geofences are easy to set up and modify as needed for multiple employees and locations.
• Provides notification to employers when an employee punches in or out of the geofence, helping to improve accuracy of time data and ensuring that employees are where they need to be.
• Notifications alert employers to potential problems before they become chronic.
• Geofencing helps prevent time theft by enforcing schedules and tracking location with GPS.
• Provides an accurate record of work hours and location for compliance.

Employee Benefits

• Geofencing ensures that employees always have an accurate record of their punch location and work hours.
• Provides a reliable method to demonstrate punctuality and accountability.
• Confirms to employees that they are at the correct work site.

If you want to learn more about how you could incorporate geofencing in your workforce management strategy, contact Payroll Partners.

4. Fixed Clock:  While hardware time collection devices have been around since the 1880’s, today’s clocks include capabilities a 19th Century business owner could only dream of. This category of punching devices includes clocks that use a PIN entry, card punch, or a proximity card/fob to identify an employee and record shift time. Unlike traditional punch clocks, these clocks integrate with advanced timekeeping software like TimeWorksPlus.Customizable clock prompts allow employers to collect a wealth of information at punch in/out. This information can help any business become more agile and efficient. With dynamic, real-time employee time and labor data and reporting, smart managers can improve productivity significantly. It also helps businesses manage a large workforce with a relatively small management team.A fixed employee time clock is a good choice for hospitality, manufacturing, warehousing and transport operations, call centers, industrial facilities, retail establishments, and traditional office settings.Consider the advantages of a fixed hardware clock as part of a unified timekeeping system:

Employer Benefits

• Clock hardware is a convenient and secure way to track time when you need to know that employees are punching in on the job site.
• Hardware clocks can include biometrics to reduce errors, speed lines, and eliminate things like buddy punching, early clock in, or incorrect punches.
• Hardware clocks can include thermal scanning to detect elevated temperature before an employee enters the workspace.
• Clock lockout can prohibit employees from punching in too early to help reduce unplanned overtime.
• Hardware clocks can work as a remote solution – just unplug and use the battery to record punches on the job site, then bring it back online and sync with the system to update records.
• Hardware clocks include intelligent clock options which prevent errors and help ensure compliance.
• There are a variety of hardware clocks that are fully compatible with our automated timekeeping for accurate real-time collection and notifications.

Employee Benefits

• Hardware clocks are convenient and easy to use.
• Clock hardware is fast, so employees don’t spend additional time in line waiting for each other to punch in.
• PIN codes allow employees to memorize a secure method to activate their account on a clock.
• Clock hardware is secure and doesn’t use actual photos of an employee’s fingerprint or face so that only the system can recognize them based on a numeric algorithm. No sensitive data can be stolen from the hardware that can be used to identify an individual.
• With a power source and Wi-Fi, you can install clocks in convenient locations so employees can punch in at the gate when they come to work.

Would you like to learn more about modern time clocks? Contact Payroll Partners today.

5. Biometric Time Clock:  A biometric time clock is the ultimate time collection device when it comes to security, accuracy, and speed. A biometric time clock identifies employees with a unique biological identifier. We offer a fingerprint clock and two facial recognition clocks, one which has a thermal scanner.

Employer Benefits

• Fingerprint and facial recognition quickly identify the employee upon punch in and punch out.
• Biometric confirmation is a reliable way to eliminate buddy punching and other types of time theft.
• Facial recognition is a better choice for employees with worn, unreadable fingerprints (typical in construction and hospitality) or those that wear gloves.
• Thermal scanning can detect a fever before the sick employee enters the workplace, which protects the rest of the team.
• Biometrics are ultra secure and offer compliant methods of verification.
• Employees don’t need to remember a PIN or keep track of a fob or card.
• Biometrics assure that employees are getting credit for their own work, and that others are unable to tamper with their time data.
• Biometrics are fast and convenient and prevent long lines during shift changes.
• Intelligent clock features help employees punch the right buttons at the right time.

Employee Benefits

• Employees don’t need to carry a fob or card, so items don’t get lost or stolen.
• Facial recognition is ideal for employees with worn fingerprints, those who wear gloves or those that work in dusty or wet environments that can interfere with fingerprint authentication.
• Employees don’t have to wait in a line at the time clock during shift changes.

Some employers are hesitant to use a biometric clock because of biometric security and privacy laws. It’s important to understand that these clocks convert facial scans and fingerprints to a digital file that doesn’t violate these laws. However, some states require employers to obtain employee consent before collecting biometric information. Therefore, employers should stay abreast of federal, state, and local laws when implementing a biometric clock.

To learn how a biometric clock can help your business, contact Payroll Partners today.

In conclusion

Business owners using manual timekeeping should consider upgrading to modern time collection. Flexible punching methods allow employers to meet unique needs related to employee abilities, operational logistics, company culture and the compliance environment. Our timekeeping solutions provide ROI immediately and the advantages compound over time. To talk to a timekeeping specialist, contact Payroll Partners today.

This information is provided with the understanding that Payroll Partners is not rendering legal, human resources, or other professional advice or service. Professional advice on specific issues should be sought from a lawyer, HR consultant or other professional.