DO YOU HAVE THE MOST COST-EFFECTIVE TIME AND ATTENDANCE SOLUTION? FROM A LEADER IN WORKFORCE MANAGEMENT SOLUTIONS www.mitcsoftware.com
INTRODUCTION Payroll often represents 50 to 70 percent of a service organization s total cost structure. It is important to evaluate whether your service organization utilizes the most costeffective time and attendance solution for payroll and billing. Problems with ineffective time and attendance systems fall into four main categories. Some suffer from multiple problems in all four areas. 1. Ineffective time and attendance or scheduling may be preventing your organization from achieving significant payroll-related savings and productivity. 2. An outdated time and attendance solution may be costing more than necessary. 3. A partial automation of time and attendance may have left a significant number of employees using costly paperbased systems. 4. Lack of integration or capability may result in duplicated costs being incurred for time and attendance, scheduling, billing or PTO management software. If your time and attendance system suffers from any of the following defects, it may be time to evaluate other solutions. Payroll often represents 50 to 70 percent of a service organization s total cost structure. Overtime Still Greater Than 2 to 3 Percent: Automating time and attendance has resulted in some payroll savings, but overtime remains stubbornly high. This can be due to lack of visibility, uncontrolled unauthorized attendance, overlapping shifts, buddy punching and unresolved schedule conflicts. Compliance Rates Lower Than 97.5 Percent: Excessive edits are a burden on managers and the payroll department, and may conceal a multitude of problems ranging from poor attendance going unreported, to an inability to capture accurate job cost or billing information at clock-in. Ineffective Scheduling: For service organizations, successful time and attendance often requires advanced scheduling solutions that allow managers to fill open positions quickly and with appropriately skilled staff, without incurring unnecessary overtime. Separate, manual or ineffective scheduling systems lead to inefficiencies and failure to make attendance patterns visible. Schedule Prompting: Schedule Prompting helps reduce absenteeism by automatically reminding employees of their next shift by text or email, and can even include helpful work instructions. Billable and Documentation Services Not Tracked: For many service organizations, accurate attendance records affect billing as well as payroll. Maintaining parallel reporting systems causes duplication of effort, delays in billing, lost billing, missed documentation, inaccuracy, and increased risk that payroll and billing records may not reconcile in the event of an audit. WWW.MITCSOFTWARE.COM 1
Not Real Time: Capturing attendance in real time is vital for service organizations, especially when employees work is relatively unsupervised at remote locations. Time and attendance that relies on after-the-fact PC data entry fails to maximize direct payroll savings or to provide a reliable way to manage hours of service in a timely manner. No-Show Alerts: The consistent delivery of services is paramount to any service organization. Unfortunately, some employees will always fail to follow attendance procedures. Outdated time and attendance solutions sometimes lack the capability to monitor attendance in real time and to alert managers automatically. Automated Alerts: Using real-time data, MITC even provides advance warning of potential problems, such as a job over budget, an employee approacing overtime, and more. MITC elimiinates the need to use repports, manual emails, and to-do lists. MITC scans your database in search of discrpancies and changes. When a discrepancy or change is identified, it sends alert via text or email to the manager assigned to that employee or job. Awake Check Calls: For employees working overnight, it is important for service and for health and welfare that employees remain awake and onsite. Ineffective time and attendance systems often do not support nonpayroll transactions that may be important to safeguard operational performance. Capturing attendance in real time is vital for service organizations, especially when employees work is relatively unsupervised at remote locations. Ineffective time and attendance systems often do not support nonpayroll transactions that may be important to safeguard operational performance. Manual Adjustments: The consistent delivery of accurate payroll is jeopardized if the time and attendance rules do not support all the organization s pay rules. Relying on manual calculations by supervisors and payroll clerks for part of the payroll undermines the effectiveness of the whole system, reintroduces opportunities for errors and wastes time. Common problems with ineffective time and attendance solutions usually involve holiday, job, shift or task pay differentials, and/or additional pays such as health and welfare and PTO allocation. Overtime Costing: Ensuring overtime is automatically allocated to the correct cost center is very important for some service organizations. The inability to make these allocations intelligently and automatically causes errorprone manual intervention and adjustments, and delays payroll processing. Weighted Overtime: Organizations paying the same employee multiple pay rates risk paying overtime at higher rates than necessary, failing to comply with Department of Labor (DOL) regulations, or paying excessive time due to manual calculations if weighted overtime is not automated. LImited Access: Managers can access MITC from anywhere, any time using any internet-enabled device, such as a smartphone. Managers can check attendance at any job, quickly fill open positions by searching the database for available and qualified employees, and more using the Managers Mobile Work Center. WWW.MITCSOFTWARE.COM 2
The consistent delivery of accurate payroll is jeopardized if the time and attendance rules do not support all the organization s pay rules. Self-Service: If employees are not able to receive voice messages from managers, request PTO, submit time and attendance change requests, and view schedules, a manual work around or alternative process is required. This lowers employee and manager productivity. HR Alerts: For some service organizations it is vital that staff retain valid licenses and training certifications. Being able to communicate information relating to expirations and to track training minimizes the risk of being out of compliance with regulations. This in turn reduces the burden on managers and personnel departments. Excessive Fees: Some time and attendance systems are rented on an employee, transaction, or hardware unit basis. Costs can be as high as $5 to $6 per month per employee, or $0.12 to $0.45 per transaction or call, plus hardware rental fees. As the organization s IT knowledge grows, the cost of hosting its own time and attendance solution shrinks. Outsourcing what are today relatively simple IT tasks may no longer be cost-effective. Excessive Maintenance Costs: Outdated time and attendance solutions often not only fail to deliver a fully effective solution, but - because they are based on older, more costly technology - incur substantial annual fees to maintain. Partial Automation: This can be a result of simple omission at the time of purchase due, for instance, to a lack of understanding that client billable services as well as payroll could potentially be tracked, or to what may have appeared to be excessive costs associated with telephone timekeeping for remote staff. Lack of Integration: For service organizations where payroll represents 50 to 70 percent of the cost structure or where schedules, billing and payroll are closely related, lack of integration reduces control of unauthorized attendance, overlapping shifts and buddy punching. This may cause delays, problems, and inaccuracy in processing billing or payroll. Integration lowers costs, increases productivity, and provides the visibility needed to improve day-to-day operations. Multiplicity of Systems: Problems and discrete solutions individually identified over a period of time may have led to the implementation of numerous unrelated systems. This may ultimately have created an unwieldy non-integrated system that now causes excessive costs, training issues, and the duplication or even triplication of work. For service organizations where payroll represents 50 to 70 percent of the cost structure or where schedules, billing and payroll are closely related, lack of integration reduces control of unauthorized attendance, overlapping shifts and buddy punching. WWW.MITCSOFTWARE.COM 3
QUESTIONS TO ASK WHY ARE SOME TIME AND ATTENDANCE SOLUTIONS MORE COST-EFFECTIVE THAN OTHERS? MITC encounters many instances where customers have invested in a time and attendance solution from a highly reputable, nationally known organization with a successful track record. The inability of the competitor to solve the full range of the customer s problems is not a reflection on the competitor as a whole, but on the lack of alignment between its particular solutions and the complex needs of service organizations. Any system will reflect its primary customer base. It is highly unlikely that any solution designed, for instance, for large retail outlets or hospitals will readily adapt to the unique requirements of a service organization with remote employees whose work is relatively unsupervised. Attempts to do so will prove costly or inadequate. WHY DO SOME TIME AND ATTENDANCE SOLUTIONS COST MORE THAN OTHERS? Some software organizations are more efficient than others. Some software is relatively easier to install and maintain. These factors can impact the total end-user price. In general, however, a solution designed out-of-the-box for service organizations will prove less expensive to implement and maintain and yet be more effective. Time and Attendance solutions that are closely aligned with the needs of their customers are easier for customer and vendor to implement, reducing costs at both ends. Furthermore, repetitive implementations of solutions in similar service organizations will ensure that the time and attendance solution provider staff are highly knowledgeable about service organizations unique needs and can quickly become a valued partner as well as supplier. MITC is a world-class Time and Attendance provider to service organizations such as Building Service Contractors, Home Health Providers, Human Service Agencies, Pool Management Contractors, Security Contractors and other organizations with remote employees. With over 1,000 implementations worldwide, MITC has the experience and depth to deliver highly cost- effective solutions to these types of customers. MITC hardware, software, implementation plans, service plans and audits have all been selected and designed for service organizations with remote employees. CAN MY ORGANIZATION AFFORD TO INVEST IN ANOTHER SOLUTION? Any time and attendance solution has to justify itself based on the return on investment. When payroll represents 50 to 70 percent of a service organization s total cost structure, a relatively small percentage saving can be sufficient. There are two key factors to consider: 1. Cost of current ineffective solution versus the cost of a new, more effective solution. 2. Additional payroll savings or productivity gains that may be reasonably derived from the new, more effective solution. WWW.MITCSOFTWARE.COM 4
REAL LIFE EXAMPLE, SERVICE PROVIDER, NORTHEAST USA: Direct Savings Current annual costs of ineffective time and attendance solution $30,000 Annual cost of new, effective solution $29,000 Total cash cost of new, effective solution -$1,000 Indirect Savings Value of productivity gains in time savings from more effective scheduling $25,000 Potential Additional Payroll Savings Overtime still 8% of payroll with ineffective time and attendance solution $416,000 Benefit of reducing overtime from 8% to 4% with new, effective solution $208,000 Net annual benefit for service organization $208,000 Total Annual Return on Investment from new, effective solution $234,000 In the example above, a service organization was using a time and attendance solution from a reputable, nationally known organization. The annual fees were approximately $30,000. The fees by themselves were not the major problem. The real problem was that overtime had fallen from 15 percent, but then remained stubbornly high at 8 percent due to an ineffective scheduling solution provided as part of the time and attendance solution. Managers continued to rely on time-consuming paper and Excel spreadsheets for scheduling, and were unable to fill open positions quickly with the appropriately skilled staff, without incurring unnecessary overtime. Selfservice was weak. Employees and managers could not obtain up-to-date information on schedules without emails or phone conversations, leading to lack of communication and loss of productivity. WWW.MITCSOFTWARE.COM 5
ZERO COST SOLUTION Upgrading to a new, effective MITC solution designed for service organizations was available at $0.00 cash cost in real terms, with projected productivity gains from reducing the time schedulers spent managing schedules by 16 percent. The real driver, though, was from conversations with other service organizations using MITC. The customer was powerfully attracted by the very real possibility that using a more effective scheduling solution, tightly integrated into time and attendance, could potentially reduce overtime by an additional 50 percent, saving over $200,000 per year. Furthermore, the risk was very low. There was no additional cash required, as the existing payments for service fees would cover the cost of the newer, more effective, lower cost solution. CONCLUSION If your time and attendance system suffers from too many defects, now is an important time to evaluate alternatives. Relatively small positive changes in payroll cost reduction, improved productivity or direct fees will have magnified benefits. A more effective solution can reduce costs and increase operational efficiency. When a service organization replaces a cost-inefficient system, additional reductions can be achieved by eliminating payroll errors, payroll inflation, unearned leave, and overtime, and can often be done with no additional cash investment. ABOUT MITC MITC provides modular workforce management solutions and services to support all the needs of service organizations time and attendance, advanced employee scheduling, payroll rules and reporting engine, workforce analytics, payroll and billing integration, and more. For 25 years, MITC has grown to serve over 1,500 organizations (with anywhere form 5 to 10,000 employees) in the USA, the UK, Africa, Australia, Canada, Ireland and New Zealand. They have selected MITC to help control costs, save time, improve productivity and ensure compliance. Visit www.mitcsoftware.com to learn more. WWW.MITCSOFTWARE.COM 6