Small Business Time and Attendance: An Idea Whose Time Has Come

Too Small for Time and Attendance?

Posted on 05-Oct-09 by The Timekeeper

It has come to my attention that some small business owners still don’t see the value of installing a time and attendance tracking system — despite all the evidence I’ve accumulated here demonstrating to the contrary.

If you still need convincing…

If you have any employees at all, tracking time and attendance is a good idea, for several reasons:

Human nature. People tend to be more careful about how they spend their time when they know somebody else is watching. In survey after survey, a distressingly high number of employees admit to “time theft” (taking extra-long lunches or breaks, coming in a few minutes late and/or leaving a few minutes early, that sort of thing). That can add up to days (even weeks) worth of lost time over the course of a year — time you’re paying for, but that they’re not working.
The law. The law requires if you have employees who are eligible for overtime, you must accurately track their time. Because if you don’t, how do you know when (and how much) to pay overtime? Makes sense, eh? And what’s the one charge I see in common across almost all wage and hour actions brought by the DOL? That the employer wasn’t keeping good records of employee time worked. If you don’t track hourly and salaried non-exempt employee time adequately, you’re just setting yourself up for trouble. (Don’t forget: the US DOL is hiring up to 250 additional investgators to tackle wage and hour inspections. They’re not messing around. You shouldn’t either.)
Employee retention. Even if you aren’t required to pay your employees overtime because they’ve been classified as salaried-exempt, it’s still a good idea to keep track of how much time they’re putting in. If you find all your exempt workers are generally putting in many, many hours of unpaid overtime week after week, you could be looking at an under-staffing issue (or an over-work issue, which is pretty much the same thing when you think about it). Too much work and too little staff eventually leads to burnout, then turnover… which leads to increased expenses for you to recruit and train replacements. Not a good thing.
Employee utilization. If, on the other hand, you’ve got people sitting around waiting for work, maybe you’ve got too much staff… or maybe you can step up your initiatives, start on a few more of those projects you’ve got waiting in the wings, get people working a little harder to grow the company’s business.

The point is, unless you’re tracking employee time, you’re flying blind.

Start sooner rather than later

Even if you only have a few employees — even if it’s just you — there’s no time like the present to start tracking time. People don’t like change, so it’s important to start good business habits as early on as possible. The more you build accurate time tracking into your corporate culture, the more likely it is the process will “stick” as the business grows.

Easier and more affordable than you might think

Fortunately, automated time and attendance tracking is affordable — maybe a LOT more affordable — than you might think. You don’t need a five- or six-figure investment… for as little as $100 or so, you can get started with an entry-level installed software based employee time tracking system.

For even less up-front cash out of pocket, you can sign up for a hosted web-based time and attendance system where you pay-as-you-go on a month-by-month basis. Even sophisticated biometric systems can be had for only a few hundred dollars these days.

And with the technologies available today, recording your time can be as simple as logging in to a website, or pressing your finger on a small reader, or even simply firing up your computer. Some systems even include the ability to clock in from a remote location using a cell phone. Easy and hassle-free, seriously.

(And I know from personal experience — my employer has everybody clock in and out every work day. We use a finger-scan biometric terminal. Takes me all of about 10 seconds, tops.)

Saving the best for last

What’s the best part? Because these automated systems automatically calculate your hours worked (for employees who get paid overtime) and download everybody’s data directly to your payroll software or service bureau, it takes less time to prepare payroll, and clerical errors are virtually eliminated. Between the savings on payroll prep and the reductions in “time theft,” these systems typically save hundreds of dollars a year on payroll prep — enough that the typical automated time and attendance system has paid for itself within a few months.

So, if you’re not formally tracking employee time yet, what’s your excuse? And if you are, what method are you using?

Filed under: Accounting issues, Workforce management

2 Comments

Comment by M2Sys on October 27, 2009 4:33 pm
biometric finger print scanners are becoming an even more popluar option for tracking time and attendance because, for the most part, it eliminates human reporting errors with little to no surveillance.

finger vein readers are quickly becoming even more popular because they are they are even easier to use (some people have corrupted fingerprints), non invasive, and provide the added security that nobody can copy your vein pattern.

Biometrics are a very affordable option, and when you think about it, pay for themselves in the money they can save a company over a short period of time.
Comment by The Timekeeper on November 6, 2009 12:44 pm
Excellent point. A common worry for many business owners is “buddy punching.” With a biometric solution, buddy punching is virtually eliminated. Thanks for sharing your thoughts!