Total Workforce Management 2013: The State of Time and Attendance

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1 Total Workforce Management 2013: The State of Time and Attendance Tracking time and attendance is at the core of workforce management. From Fred Flintstone marking his timecard with the beak of a pterodactyl to GPS-enabled apps and biometric data-collection devices, organizations always have a need to know who is in attendance and be able to track when and where they are working. Based on the latest data collected between May and June 2013, this Research Brief is the first in a series addressing critical workforce management issues, looks at the trends influencing time and attendance today, and how time and attendance interacts with other critical workforce management systems, including payroll, scheduling, and absence management. July 2013 Research Brief Aberdeen s Research Briefs provide a detailed exploration of a key finding from a primary research study, including key performance indicators, Bestin-Class insight, and vendor insight. The Case for Workforce Management The theme that emerges as organizations think about their workforce management initiatives is that of keeping up with change. Organizations are struggling to develop an agile and flexible workforce and use data to help them make better decisions about both their labor and their spend (Figure 1). Figure 1: Pressures Driving Workforce Management Initiatives 2013 Total Workforce Management Series Aberdeen s 2013 research series is being presented as a series of research briefs looking at: Time and Attendance Scheduling Absence Management Core HR This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

2 Page 2 To truly respond to these challenges, organizations must consider the full scope of total workforce management. Aberdeen defines total workforce management as core HR (HR and employee data management and system of record), payroll, time and attendance, scheduling, and absence management, and we ll go into detail on many of these topics in this research series. Time and Attendance Strategies Managing time and attendance is a critical element to an organization s ability to understand who is working for them on any given day, and on any given task, and is often the first link that organizations establish between HR and financial systems such as payroll. This data collection and integration is critical to organizational decision-making around talent. As organizations look to tools and technologies that help them solve these critical workforce management challenges, time and attendance strategies should focus on an organization s ability to standardize, automate, communicate, and integrate. Definition Aberdeen defines total workforce management as the union of core HR (HR and employee data management and system of record), payroll, time and attendance, scheduling, and absence management. Standardization In order to tackle the kinds of challenges outlined above, the first phase organizations look to is standardization (Figure 2). This is important because automating poor processes only gets you to the wrong result more quickly. And it is clear that today s organizations are working towards this standardization before moving to automation. Figure 2: Workforce Management Strategies Organizations need to start by standardizing workforce management processes, not only to ensure that they are the most efficient and effective possible but also to support transparency. Organizations need to have consistency and transparency in how they track and calculate hours worked,

3 Page 3 pay, and overtime and time-off policies for two important reasons. One, it helps managers and employees understand their workforce management process and how it impacts them, and it builds their trust with the organization by ensuring that everyone is treated the same way. And two, organizations must be transparent to external parties, to local, state, and federal governments as required by law, to any unions representing their employees, to shareholders, or in the case of public sector organizations, to the taxpayers who fund the organization. The ability to track and report, and prove that policies are executed consistently, is of critical importance for compliance as well as for manager and employee engagement. Organizations need to integrate their workforce data with other business intelligence to perform analytics. This also requires standardization to ensure that data has been collected in a uniform way. All organizations want to have better control over every aspect of their business, including labor spend and return on talent investment. Integration allows organizations to understand the impact of various workforce decisions on the overall health and profitability of the organization. This line of sight also helps business leaders truly connect their business plans with their workforce strategies. Automation Once organizations have established standards and processes, automation is the next logical step to improve efficiency and effectiveness. As illustrated in Figure 3, while nearly a third of organizations still have manual time and attendance processes in place, they are more likely to automate time and attendance than they are to automate scheduling. Figure 3: Source of Functionality Fast Facts While nearly a third of organizations still have manual time and attendance processes in place, they are more likely to automate time and attendance than they are to automate scheduling.

4 Page 4 It is also interesting to note that 41% of organizations with automated time and attendance utilize tools that are part of either an integrated workforce management suite or part of their ERP solution. Using these kinds of tools for automation may help organizations tackle issues with one solution, both automating and integrating their time and attendance data in one step. Presumably, functionality within an integrated workforce suite will allow for easy integration of time data with critical areas like scheduling and payroll. When time and attendance is part of the ERP solution, it can help feed this data directly into dashboards and analytics tools that combine business data with workforce management. There are many potential benefits to workforce management automation, but Figures 4 and 5 identify some of the most significant. Figure 4 looks at the overall benefits that organizations that have implemented automated workforce management solutions have experienced. Fast Facts 41% of organizations with automated time and attendance utilize tools that are part of either an integrated workforce management suite or part of their ERP solution. Figure 4: Benefits of Workforce Management Automation Freeing up the time of both HR and business personnel is a critical benefit, ensuring that the organization s time is spent on strategic activities and not just administration. This is particularly important in organizations like retail or manufacturing, where you want managers on the sales floor of the shop getting work done instead of managing timesheets. Organizations also see improved data accuracy as they reduce the number of manual touches and reduced overall labor costs as a result of increased visibility. These same kinds of benefits are quantified in Figure 5, which looks specifically at the results achieved by organizations automating their time and attendance solutions. These organizations see a significant reduction in manual workforce management transactions, as well as increased accuracy of their workforce management data. Accurately tracking time off can result

5 Page 5 in significant cost savings, ensuring that paid time-off (PTO) is paid out as it is actually taken so that at the end of a year, or even upon an individual leaving the organization, employees are not owed for untaken leave. Figure 5: Impact of Automation Fast Facts Organizations using automated time and attendance saw 57% fewer errors in PTO accrual calculations. Accurately tracking benefits qualification will become increasingly important, particularly in the U.S. as the regulations laid out in the Affordable Care Act begin to take effect over the next several years. Several of the provisions of this act require individuals who work over a certain number of hours to be provided with healthcare coverage, so accurately understanding who has qualified during a specific time period will allow organizations to avoid unexpected costs from either providing benefits or paying penalties. Communication Also essential to transparency and engagement is the ability for individuals and managers to access their data. Self-service access to workforce management data and processes has been a growing trend for a number of years for several reasons. First, it is much more efficient as it allows both employees and managers to access information on demand as opposed to having to call someone in HR. This also frees up HR resources to focus on more value-added activities. In addition, it can help improve accuracy as individuals can maintain data such as contact information and changes in status versus filling out a form that must go through manual entry. The fewer times data has to be entered or subjected to human error the better. Currently, 62% of organizations surveyed provide employee self-service, and 61% of organizations provide manager self-service to workforce management data.

6 Page 6 As illustrated in Figure 6, nearly all organizations with self-service provide manager access to critical timekeeping activities via browser-based portals. Mobile access via smartphone apps and tablets is also beginning to take place, but its availability is much less common. This trend holds consistent across employee self-service as well, with the majority of access provided through the browser. Figure 6: Manager Access to Self-Service Fast Facts Automated time and attendance tools that allow for self-service access also affect engagement. Organizations with automated self-service reported 72% of employees rated themselves highly engaged, as compared to 64% of employees in organizations that do not have automated time and attendance in place. 72% of employees in organizations with automated time and attendance solutions rated themselves as highly engaged compared to 64% of employees in organizations without automated time and attendance. Integration Integration of time and attendance data with other aspects of workforce management helps organizations not only improve accuracy but also provide the foundation for analytics. Seventy percent (70%) of organizations currently integrate time and attendance data with their scheduling solution, and 66% integrate time and attendance with payroll. Integration with scheduling is important, as it helps organizations look at historical performance data, combined with historical attendance data, and understand who their high-performing individuals and teams are. This data can then be fed into the scheduling process to improve business results. Payroll is another facet of workforce management that benefits from integration with time and attendance data as it keeps overhead costs down, decreases the amount of manual workforce management transactions, and

7 Page 7 leads to fewer errors in tracking time worked and handling payroll processing. As demonstrated in Figure 7 below, organizations that integrated time and attendance with payroll had an almost 30% lower rate of payroll processing errors, saw a 32% lower error rate in the tracking of actual time worked, and avoided the 6% year-over-year increase in manual workforce transactions experienced by organizations without integration. Figure 7: Payroll Integration Means Greater Accuracy Organizations that integrate time and attendance with payroll end up spending less money and use fewer resources to execute critical HCM processes. With savings like this, organizations can allocate these freed-up resources to reinvest in their business, focus on strategic priorities, and improve overall business performance.

8 Page 8 Case Study Sabre Holdings A global travel technology company that provides services to both consumers and large travel companies worldwide, Sabre Holdings employs about 10,000 employees in 60 countries. Founded in 1960, Sabre Holdings has four major business units Sabre Travel Network, Sabre Airline Solutions, Sabre Hospitality Solutions, and Travelocity operating across the globe with customer care centers in the United States, Argentina, India, Poland, and Uruguay. With such a large network of employees situated across the globe, it could be very easy for an enterprise of this size to lose sight of unique individuals and cultures that make up their company. But when rolling out their automated time and attendance solution, Sabre managed to implement a global system that took into account the unique needs of each of its locations. Prior to implementation, each location had their own manual processes for tracking their employees time and attendance and leave, which meant management had to sort through an extensive amount of varied information to understand simple data points. Some locations used home-grown tools, others used Excel spreadsheets, and some managers even scrawled notes on loose-leaf paper to record who had taken time off, all of which were time consuming and ultimately an unproductive use of time for Sabre s management. The time and attendance tools were originally sought out as a way in which to appropriately monitor and report on employees activities worldwide. With leadership buy-in from the onset, Sabre focused on identifying local stakeholders and decision-makers and ensuring they were on board with each implementation. They took the time to understand the unique needs and culture of each location and map out an appropriate implementation training plan to fit that location. Before implementation, Sabre handpicked local experts, (or timekeepers as Sabre called them), who were employees around the globe who trained extensively so they could be resources for their colleagues when issues arose. From the very beginning, Sabre used face-to-face training, webinars, and WebExes for all branches far and wide. So no matter the location, Sabre sent representatives well versed with the technology to train with each branch for weeks at a time to ensure all employees had an idea of how to use the technology. Sabre made sure to cover all avenues for implementing the tool, so even when language barriers cropped up between training management and local employees, trainers had clear, example-driven instructions to provide their employees. Sabre focused on wins for both employees and managers. Employees now have self-service access to request time off, and managers no longer have to manually update schedules, reduce vacation balances in the system, or perform manual tracking when an employee requests time off. Sabre corporate management experienced a multitude of benefits from rolling out time and attendance, most notably the accessibility of centralized information for management worldwide. This automated tool has eliminated the need for manual processes and has made it even easier for managers with employees spread out across the globe to manage leave. What s more, Sabre created a uniform platform for across the globe so a manager in the US, who may have team members in multiple locations, now sees employees leave data in a uniform way. With such processes in place, Sabre effectively centralized their workforce management resources, which allowed them to use previously allocated resources such as money, time, and energy on other business challenges.

9 Page 9 Key Insights Time and attendance is just one aspect of total workforce management, but it is often a critical foundation for further process improvement, automation, and data integration. As organizations look to improve and automate their time and attendance solutions they need to keep in mind the importance of standardizing processes, automating to improve efficiency, communicating to ensure transparency and compliance, and integrating to allow for better decision-making. For more information on this or other research topics, please visit Human Capital Management Trends 2013: It s a Brave New World; January 2013 Improving Productivity and Reducing Labor Costs with Automated Absence Management; December 2012 Related Research Workforce Management 2012: Efficiency, Effectiveness and Engagement; July 2012 Authors: Mollie Lombardi, Vice President and Principal Analyst, Human Capital Management, ([email protected]); Zach Lahey, Senior Research Associate, Human Capital Management, ([email protected]) For more than two decades, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter the facts that enable companies to get ahead and drive results. That's why our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500. As a Harte-Hanks Company, Aberdeen s research provides insight and analysis to the Harte-Hanks community of local, regional, national and international marketing executives. Combined, we help our customers leverage the power of insight to deliver innovative multichannel marketing programs that drive business-changing results. For additional information, visit Aberdeen or call (617) , or to learn more about Harte-Hanks, call (800) or go to This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. (2013a)