01 Aug 5 Ways to Eliminate Unplanned Overtime from Your Budget
In our previous Tuesday post, we discussed the problems with unplanned overtime and its ability to wreak havoc on your company’s labor budget. We also outlined the solution to this common issue: automating your timekeeping processes. Explore five ways that automated timekeeping can prevent unplanned overtime.
How Automated Timekeeping Reduces Overtime
Understanding how an automated timekeeping system can reduce or even prevent unplanned overtime can help you create a more accurate labor budget and stick to it.
Provides a Better Sense of Accurate Employee Work Hours
It’s no secret that people make mistakes. But when it comes to tracking time, the errors may be intentional, as adding a few extra hours to a timesheet can help an employee get a larger paycheck. The American Payroll Association estimates that the error rate on manual time cards falls between 1% and 8%. Managers can also make errors when entering manual data, leaving multiple points of concern in the payroll process.
You need to know how many hours your employees are actually working to create a more accurate budget. An automated timekeeping system provides that, as employees punch in and out for their shifts instead of writing down their own arrival and departure times.
Allows for Alerts
Alerts are essential in preventing unplanned overtime. Most managers don’t have the time or bandwidth to monitor employee time cards. But with alerts in place, a manager will receive a notification when one of their employees is close to moving into overtime. When this alert pops up, the manager can decide how to proceed, whether that involves sending the employee home or arranging for coverage. Without alerts, it’s much more difficult to keep tabs on hours worked and avoid unplanned overtime.
Integrates Time Data and Payroll Processes
We mentioned the risk of inadvertent time card errors, but some employees knowingly fudge their time records to increase their pay. When this includes adding overtime hours, it’s known as overtime fraud.
A study performed by the American Payroll Association indicated that three-quarters of all American companies deal with timekeeping fraud in some way. Service sector workers reported adding an average of nearly five hours of overtime to their timesheets every week.
Public and private businesses have been impacted by stolen time and time card padding. Stopping overtime fraud is the only way to prevent overpaying employees for time they didn’t work. And automated timekeeping can help you achieve that goal. And with accurate time data that flows into the payroll processing system through an integration, you can be sure that employees’ paychecks will also be correct.
The time and labor solution we offer includes payroll review, a feature that simplifies the payroll process while allowing managers to review potential time issues. You can instantly see which employees are nearing (or over) their scheduled hours and make adjustments accordingly.
Establishes Rules Around Punching In and Out
Enforcing schedules can also help you reduce unplanned overtime. But rather than standing at the time clock with each employee to verify their shift start time, you can use automation to create rules around punches. A clock with this functionality can lock out an employee until the approved time, preventing them from clocking in before their scheduled shift begins. Of course, this doesn’t mean you should require an employee to work before clocking in, as this is against the law. Rather, clock lockout functionality discourages employees from coming to work too far ahead of their scheduled start times.
You can also set up scheduling rules that issue alerts when an employee’s schedule includes more than their scheduled number of hours, thus putting them into overtime. When employees have varied-length shifts or managers oversee large teams, these rules create more automation in the scheduling process. A manager doesn’t have to waste time adding up hours in different scenarios or searching for an employee who can work a particular shift without going into overtime.
With the right system in place, your business can avoid unplanned overtime and meet its financial goals without going over on the labor budget. Our affordable time and attendance solutions make it easy to establish automated timekeeping practices, set up alerts, and integrate with various payroll processing systems.
Ready to save your business budget from unplanned overtime? Visit Payroll Partners or call (817) 226-8111 to get started.
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.