Time Management Solutions for the Modern Workforce

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1 Time Management Solutions for the Modern Workforce

2 Time Management Solutions for the Modern Workforce Overview This report will inform business owners and professionals about the costs and challenges associated with an ineffective employee time-tracking system while highlighting the positive impacts of a more innovative and advanced time management solution. Hypothesis The hypothesis is as follows: Employers need an effective and efficient method for tracking the time that hourly employees work. Approximately one-third of all companies still use time cards to track employee time and attendance. 1 In this age of digital interconnectivity, telecommuting and virtual offices, time clocks and punch cards are outdated and irrelevant. Costs per Employee These systems require an HR professional to perform time-keeping functions and prepare Labor related to collecting, reports, thus they are inherently expensive, slow and offer insufficient functionality. calculating and entering These antiquated systems are also prone to human error and allow employees to cheat. payroll data: $65 per A business owner s time is best spent focusing employee on the strategic aspects of his or her company rather than overseeing Time calculation inaccuracies: administrative, time-keeping functions. Companies can perform more effectively $280 per employee with a time and labor management system that can not only track employees time and Time card fraud: $150 per attendance, but can also automate the timekeeping process from beginning to end. employee Unauthorized overtime: $292 Introduction In an age of digital interconnectivity and virtual per employee offices, time clocks, punch cards and paper schedules are outdated, yet many companies still Each year, a manual timetracking solution will cost rely on them because they have not found a better solution. Approximately 33 percent of all companies still use paper time cards to track $787 per employee. employee time and attendance. 2 This antiquated solution, in addition to being less effective and more time consuming, is also more costly. While many companies have transitioned to a partially automated solution for convenience, at the Based on reports from the American Payroll Association 1, 2 Agnvall, Elizabeth. Biometrics Clock In. Society of Human Resource Professionals HR Magazine, April

3 end of a payroll cycle an HR professional or business owner is still required to complete multiple administrative functions, such as compiling timesheets, calculating overtime and inputting data. The disadvantages of this manual process are significant: There is considerable potential for human error as well as fraud associated with buddy punching, unauthorized overtime and padding hours. The process is extremely time intensive. For those companies that have Depending on the size of a business, it could be the primary job of one or more HR professionals or be a tremendous drain on a business owner s time and attention. Information provided by basic systems is not in real time, but rather compiled as part of a payroll administration cycle. As a result, by the time a mistake is detected, it can be difficult to correct. These systems only provide time and attendance information, thus the data is insufficient to proactively manage a labor force or rectify real-time staffing issues. shift workers, the scheduler provides visibility into the skill set of the worker, their overtime and the potential impact of the worker. Suzanne Chambers Payroll Manager for G&A Partners The Costs of Manual Timekeeping According to reports issued by the American Payroll Association, each year it costs companies an average of $65 per employee to collect, calculate and enter payroll data. Unauthorized overtime adds yet another $292 per employee, and mistakes in time calculation and employee fraud combined cost an additional $430 per employee. That means that manual time-keeping methods cost companies an average of $787 per employee annually. In addition to the increased cost of labor and potential errors associated with a manual time entry system, lawsuits are another potential expense. Litigation fears are increasing throughout the U.S., and while most employers think first of discrimination or harassment claims, lawsuits related to time and attendance are increasing. In 2005, U.S. companies paid out $13.6 million for overtime violations and $20.1 million for underpaid employees. 3 Even those companies named The Best Companies to Work For are not immune. Starbucks is currently embroiled in a lawsuit for unpaid overtime. Salaried managers claim that they should receive overtime because their job duties are similar to hourly employees, but the company is not yet ready to settle or change its policy. 4 It is possible to reduce costs and avoid litigation with a system that accurately records hours, prevents buddy punching and other types of time clock fraud, limits the likelihood of human error and tracks hours associated with overtime and regular time. The Benefits of G&A Time Management, a Fully Automated Solution Technological advances are making time cards and manual time entry systems obsolete. For example, biometric scanners that use biological data such as a hand or fingerprint to 3 According to the U.S. Department of Labor s Employment Standards Administration Wage and Hour Division 2005 Statistics Fact Sheet 4 According to Starbucks Overtime Lawsuit May Expand. Puget Sound Business Journal, Jan. 10,

4 authenticate information are replacing magnetic time cards. Analysts report that the use of biometrics, both for security and time keeping, is becoming more common in industries such as health care, research labs, fast-food restaurants and retail. 5 In addition to innovations such as biometrics, fully automated time and labor management solutions are also available. Labor management has been defined as the planning, organizing and directing of the operative functions of personnel. 6 G&A Time Management is a webbased time management system that provides business owners with advanced tools to conduct more thorough labor management. G&A Time Management also allows managers and HR professionals to tap into real-time labor data online, anytime and anywhere, so they can assess their immediate staffing needs and make changes accordingly. Even details such as potential cost overruns caused by excessive overtime can be flagged before the occurrence and calculated so managers can make quick, cost-saving decisions. Additionally, G&A Time Management can compile data, including overtime and paid time off (PTO), into reports that can be used for staffing analysis or directly downloaded into a company s payroll system. Service firms can use G&A Time Management to accurately track the hours their professionals dedicate to a particular project so they can better monitor the cost of each job. The benefits of a fully automated solution, such as G&A Time Management include: reduced payroll errors reduced payroll processing time reduced unauthorized leave time reduced payroll inflation improvements in labor reporting elimination of time cards scheduling 7 Job Costing For service providers, where labor is part of a company s deliverable, it is critical for the company to track hours and charge clients accordingly. The companies most likely to meet deadlines within budget are those that can monitor the project and the progress to-date. Many companies rely on managers for project updates but those managers must wait until the labor costs are calculated as part of the company s payroll process. A time management solution like G&A Time Management can sort hours by job and provide quick retrieval of real-time information. G&A Time Management accurately tracks and reports which employees work on specific projects and provides employers with detailed job costing information. 5 Agnvall, Elizabeth. Biometrics Clock In. Society of Human Resource Professionals HR Magazine, April J.E. Umphrey, D.R. Bray, and D.W. Webb. Labor Management. University of Florida IFAS Extension, original publication date September,1992; reviewed July, Babcock, Pamela. Time, Attendance Automation Comes of Age. Society of Human Resource Professionals, Feb. 9,

5 Job costing can be pretty cumbersome with Excel spreadsheets, but now being able to attach the jobs to the hours as it happens is pretty nice, said Lory Kennedy, bookkeeper at Dimension Millworks. What s really great is that we now have people clocking in and out for a job as they re working on it. Scheduling For companies that employ shift workers, such as hospitals and factories, the skill of the person in charge of scheduling is critical for profitability. In addition to ensuring that an adequate number of employees with the appropriate skill set are on the floor at any given time, the person in charge of scheduling must also balance PTO requests with overtime. Rather than manage multiple Post-it notes or an unwieldy Excel spreadsheet, the most efficient schedulers utilize a software solution that collects requests from workers and information from HR and managers. G&A Time Management allows employers and employees alike to manage and view schedules in real time from any computer with Internet access. Managers can quickly create and approve schedules for single or multiple departments or locations in just seconds. For those companies that have shift workers, the scheduler provides visibility into the skill set of the worker, their overtime and the potential impact of the worker, said Suzanne Chambers, payroll manager of G&A Partners. It also helps with vacation schedules. Employee Attendance Does the HR department know which employees have clocked in and where they are? In the past, attendance was a matter of walking down the line or peering into each cubicle. Now, with the increasing reality of offsite work and multi-site companies, employers need a way to keep track of employees, regardless of their location. For Chambers, her time management system provides the visibility she needs. I use G&A Time Management every day, Chambers said. I look online to see who s here because I can t physically see my people. I want to know who s here, who s late and who s out for the day. It s not just time and attendance; it s a management tool. G&A Time Management automatically calculates overtime, holiday and paid time off and allows employers to view, in real time, which employees are clocking in and out at any given time. Erika Barnhill, office administrator for Logan Industries International, uses the time and attendance software in conjunction with call-ins to track her employees. It only takes her about 10 minutes each day to manage her employees attendance. Payroll Submission For most HR professionals, payroll submission is a weekly chore that takes hours. Many time and attendance systems cannot effectively tally all the factors that make up a complete payroll overtime, back pay, PTO, etc. A time management system can reduce the time required for payroll by 60 percent or more. G&A Time Management allows for direct export to a payroll provider in a matter of seconds. 4

6 Barnhill s company chose a time and attendance system to help with payroll. We ve grown tremendously over the past year, so with 50 employees, payroll would definitely be a full-time job, Barnhill said. Now, payroll takes me about 45 minutes. Another common problem with payroll is the in-office time required to complete it. Many payroll managers complain of regular late nights, and those problems can be eliminated with a web-based time and attendance solution. We ve grown tremendously over the past year, so with 50 employees, payroll would definitely be a full-time job. Now, payroll takes me about 45 minutes. Erika Barnhill Office Administrator for Logan Industries International G&A Time Management saves two to three hours a day and the hassle of manipulating spreadsheets and inputting data, Kennedy said. We can actually submit our payroll over the Internet rather than faxing. I can do it from home or anywhere. It was so rushed in the past. Conclusion An advanced time management solution can help companies reduce costs, save time and eliminate errors and fraud associated with traditional time-tracking systems. Perhaps more importantly, an advanced solution can help alleviate the onerous time-tracking process and allow business owners to focus their time and efforts on the company s growth and success. About G&A Partners G&A Partners provides businesses with a full range of human resources, administrative, risk management and financial & accounting services. We work in tandem with our valued clients to position them for optimal growth. G&A handles administrative headaches and provides its clients with the most valuable commodity of all time to grow. 5

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