Time and Attendance Buyer's Guide By the purchasing experts at BuyerZone

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1 Introduction Time and attendance systems are the 21 st century equivalent of the paper time sheet. This type of software automates day to day tasks such as tracking work hours and calculating benefits accrued, providing valuable information and making your business more efficient. Whether due to overwhelming paperwork, rapid growth, or new efficiency initiatives, companies are turning to time tracking systems in record numbers. Vendors are responding to this demand with products designed for a variety of technical requirements and niche industries. As a result, time and attendance packages can now help your company automate not only the morning roll call but also your labor forecasting and management activities. This BuyerZone Time and Attendance System Buyer's Guide will help you compare multiple time and attendance software vendors and choose the time and attendance software that best answers your needs. Table of contents Is time and attendance software right for you?... 2 How time & attendance works... 2 Software features... 3 Software compatibility... 3 Choosing vendors Time and attendance software pricing... 4 Buying tips Page 1 of 5

2 Is time and attendance software right for you? Companies turn to time and attendance software to address any of several needs. Some realize that the administrative hassles of managing paper time slips exceeds their ability to manage them and remain sane. Mistakes made when adding up time sheets also lead many companies to search for a more accurate way to calculate payroll hours. Concerns about time theft can also spur the decision. Time theft describes the practice of over reporting the amount of time spent on the job. This can be as innocent as employees who round up the amount of time they have been at work or who stretch a break to last longer than scheduled. Even 5 to 15 minutes extra per day can add up to an extra week of pay per year per person. Multiply this cost across all your staffers and you can see how much it can affect your profitability. Most companies find they need a time and attendance system when they have about 25 employees they need to track. With basic systems now available for less than $1000, even smaller companies can find a time tracking system valuable. Larger companies with more than 250 employees often turn to more robust time and attendance systems for their labor management needs. With these systems, you can not only track when employees log in and out, but also proactively manage your workforce. Critical decisions such as implementing elaborate scheduling rules, understanding workforce productivity, and forecasting HR needs into new business areas cannot be made without basic labor management analysis. Time and attendance software creates a report profiling your company s human resources, helping you make the right choices for your business. Not every company needs a time and attendance system, however. If your staff is primarily salaried, time sheets have been manageable, and you don't need detailed information on how your workforce spends its time, a time tracking system is probably more than you need. How time & attendance works Time and attendance software is elegant in its simplicity. It collects employee time data and enters the information into a database. The collected data is then reviewed and approved by a manager so it can be used for payroll processing and custom reports. Entering employee arrival and departure times into the system is remarkably easy. Employees use unique identifiers to log in and out, typically a card with a magnetic stripe or barcode, or a proximity card. Proximity cards allow employees to wave the card by the time entry device instead of actually swiping the card through a reader. PC and Web based solutions are gaining in popularity, and phone based solutions are also available. For security purposes and to avoid buddy punching, where employees log in for each other, some companies offer a biometric input device that checks fingerprints or handprints to ensure that the correct person is logging in and out. Iris scanners are also available but not widely deployed due to privacy concerns. Most companies rely on administrative staff to enter attendance information for salaried workers. However a growing number of companies let employees enter their own information directly into the time and attendance system, including flex time hours, vacation time and sick day information. For companies with remote offices, data entry systems that use touch tone telephone service or the Internet complement the traditional methods of collecting time data. Page 2 of 5

3 Software features As you compare offerings, make sure to focus on evaluating the features that you intend to use most often. For example, if your company would like to use your labor data for other workflow functions, a careful evaluation of a system s reporting and data export functionality is necessary. In turn, a detailed analysis of less relevant features may not be warranted. For smaller companies Basic time and attendance systems provide routine time tracking of employee login/log out times. These time clock packages also offer schedule management, which allows supervisors to create and maintain a schedule for each employee. In addition, supervisors can set rules for scheduling staffers, including setting break times, holidays, and even whether overtime is allowable. With most systems, you can also track tardiness and patterns of absenteeism. The accounting, auditing, and reporting tools that come with your system are critical. Regardless of the specific features your company requires, understanding what basic accounting, auditing, and reporting tools the vendor offers is critical. Managers must have easy access to employee data and the tools to audit it for accuracy. The ability to generate calculations retroactively is a particularly useful feature, especially for correcting error and calculating changes in salary or benefits. For larger companies More complex labor management systems designed for larger companies feature more functionality and more robust reporting. Managing labor data according to an employee s job description, project, or location is common in these systems. Some even track production for those employees paid by per unit manufactured. This type of job costing is invaluable for companies that need to evaluate their workforce productivity or forecast their workforce needs.. Many software vendors make products geared for a specific industry, such as healthcare or education. Such industries have established work routines and specific information requirements, helping define specific scheduling and reporting needs. However, do not get roped into a purchase merely because the name on the box matches your industry. A vendor should demonstrate why you need the added functionality and justify any costs behind it. Is your time clock a little outdated? Remember to focus on the key features you want when evaluating systems. The clearer you can be in sharing your expectations, the faster a vendor can prove to you whether they can meet them. Sitting down with your staff ahead of time and creating an operational needs and goals statement is an excellent way to arm yourself against an enthusiastic sales pitch. Software compatibility One of the most common and most expensive mistakes buyers make is failing to ensure their current infrastructure will work with the new time tracking system. While you can quickly weed out any system that does not work with your current operating system, databases, and enterprise applications (e.g., resource planning systems from PeopleSoft or SAP), a superficial analysis of the system s requirements is not enough. Any vendor under serious consideration should be able to demonstrate its compatibility with your company s overall Page 3 of 5

4 environment. This means that it should be compatible with the data input devices you want to use, your current IT applications, your HR policies, and your payroll service vendor. If you plan to set rules in your time tracking system, go through your company handbook and see if the vendor can accommodate your time and attendance related rules. Similarly, you should ask about compatibility with your payroll service to ensure seamless integration. Do not purchase a product based on the upcoming or next generational pitches from a vendor. Yes, understanding a vendor's future plans can be an important factor in your investment decision, but to use a familiar analogy, remember that you are purchasing a car to drive today, not tomorrow. If they do not fully integrate with your systems today, a vendor should offer a clear and workable plan for creating a working system that addresses any conflicts you face, along with a timetable for implementation. The good news is that you will find most vendors offer systems that are compatible with typical industry configurations. Most software vendors support the standard interfaces for data entry systems and payroll services, and are flexible enough to accommodate common business rules.. Most also offer encrypted file transmission and other basic software security measures; the vendor should be able to prove the system is secure from tampering both from internal and external parties. Choosing vendors Time and attendance systems are sold directly from vendors or through resellers. Vendors will typically handle large accounts themselves and pass smaller companies to local value added resellers (VARs) who handle sales, installation and training. Start the purchasing process by investigating manufacturers. Make sure the companies you are considering have the resources to support and continue building their business. Moreover, the company should be committed to sustaining the product line you are purchasing. This is the time to learn as much as you can about the company s reputation and financial stability. When you are comfortable with the company producing the product, focus on choosing a reseller with relevant expertise. Some will specialize in time and attendance software or human resource related systems, while others will take a more jack of all trades approach. While neither is inherently better, it is always better to work with a company that has extensive experience in the application that you want installed. When considering VARs, ask how long they have carried the product that you are interested in, and how much of their business it represents. This can help you gauge their commitment to the package you are considering. To guarantee service in the event that your VAR drops the line, you may want to see how many resellers there are in your local area. Inquiring about the VAR s opinion on how responsive the system manufacturer is to issues can also be helpful when choosing a system. When checking references, make sure to inquire about all phases of implementation including installation, training and support. Time and attendance software pricing Like all enterprise software, time and attendance software is sold in various configurations. Typically, pricing is based on four variables. The server, or program engine, is priced according to its functionality. Specialized features such as a health care module may be extra. The number of employees who will use the system also affects pricing, with differing costs for administrators and employees. Finally, the quantity and type of data collection devices you use will also affect your total costs. Web based time and attendance systems typically have monthly fees instead of an upfront server license but also price their systems by the number of employees. Page 4 of 5

5 A small company can expect to pay less than a $1,000 for a basic time tracking system with scheduling functionality and payroll service integration. Prices can climb swiftly into the tens of thousands of dollars as you add more people and data collection devices to your system. Companies with thousands of employees should expect to pay a bill in the $100,000+ range. Software customization adds significantly to the price tag. No matter what your setup, make sure the vendor itemizes what they are charging you for their technology rather than just paying the full price for a closed box system. Buying tips Installation planning. Agree in advance on a plan for installation that specifies the duration of the job, and is clear about what in house technology and staffing resources your company is expected to provide. Documentation. Make sure the company supplies manuals and user documentation for the entire system. Take training seriously. Ensure adequate training is provided to your staff. Upfront instruction for the users of the more advanced reporting tools slashes ongoing support costs and can be an important motivator for staff to adopt these new productivity tools. VoIP time tracking. Some time tracking vendors now offer time tracking systems that work with VoIP phone systems where employees can log in and out via their phone handset. Page 5 of 5

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