HOW EXECUTIVES USE TIME AND ATTENDANCE

HOW EXECUTIVES USE TIME AND ATTENDANCE FROM A LEADER IN WORKFORCE MANAGEMENT SOLUTIONS www.mitcsoftware.com

INTRODUCTION Services organizations have broad goals when implementing a time and attendance system. These include: 1. Increase productivity 2. Improve compliance 3. Control payroll-related costs 4. Expedite billing Not all service organizations have all these goals, and priorities vary, but all service organizations share some of these goals. This publication focuses on how executives can use workforce management as effectively as possible to help their organization achieve these goals. YOU CAN T MANAGE WHAT YOU CAN T SEE The activities of employees drive operational efficiency and cost. Managers need to see what is happening in real time to have any opportunity to change the outcome. Executives need to be able to see whether or not managers and organizational goals are being achieved. Workforce management provides the information executives need to operate their organizations efficiently. Executives don t know what they don t know. Obstacles must be visible to be fixed. It is not possible to manage the workforce passively. If an organization is not fully engaged in managing the workforce using the most appropriate technology, the organization is abdicating control of its future. In most service organizations, payroll-related costs represent 50 75 percent of the overall budget. The importance of the many workforce issues that beset any organization is magnified in service organizations, because payroll is the biggest budget item. Common workforce management issues include: Timesheet fraud Human error in timesheet calculations or calculation of pay differentials Overlapping shifts Unauthorized attendance Buddy punching Unplanned overtime Excessive overtime levels Unreported time off Unexcused absences Inadequate real-time visibility of employee activities Working the clock to steal minutes Unapproved or lengthy meal breaks Scheduling of inappropriate employees Repeat scheduling of employees already in overtime Weak client service Incentive programs that no longer motivate Incentive programs originally designed for problems they no longer address Excessive payroll adjustments Payment of PTO time that the employee is not entitled to Management time preparing and adjusting schedules Hidden time lost churning out unused or ineffective reports Delays in producing accurate billing Complex billing calculations Under or over servicing clients and losing associated revenue WWW.MITCSOFTWARE.COM 1

Real-time workforce management solutions provide executives with the opportunity to resolve many of these issues by actively managing their workforce, introducing greater accountability for managers, and securing the goals of the organization. The first concern of a front-line supervisor is usually to get the work done. Executives want the work done as well, but they are also concerned about doing so within budget. The disparity between the front-line supervisor and the executive can result in budgets with little resemblance to the actual payroll costs. It is challenging to manage the budget while meeting service goals. Too often it ends up as a blank check. Workforce management can help with the visibility and accountability needed to rein in costs. A manager needs to have the necessary tools to see what is actually happening in the organization. That is what is meant by visibility. Managers need the technology to observe and assess workforce activity. Managers cannot be expected to manage problems that are invisible to them or are reported too late to be corrected. Managers also need to be accountable. All too often supervisors are intent on getting the job done but are managing with inadequate scrutiny from executives until costs are out of control. Managers need the technology to observe and assess workforce activity. YOU GET WHAT YOU INSPECT, NOT WHAT YOU EXPECT MITC has powerful analytical tools with key performance indicators, such as overtime percentage of payroll, variance to budget, actual vs. plan of care, profitability, and more, that Executives don t know what they don t know. Obstacles must be visible to be fixed. are designed for service organizations. MITC has the ability to identify problem areas (location, manager, division, or program) and generate exception and trend reports based on key time and attendance data. When executives start looking at these gauges, it is surprising how clearly they can see areas for improvement. MITC for instance can analyze the overall level of overtime in an organization and then highlight which managers and locations exceed the average. This makes it easy to determine the outlier departments, and to initiate steps to bring them in line with the median. MITC makes the process of finding the biggest problems more straightforward. It isolates the problem areas and quantifies the negative impact of the worst offenders. This visibility can take organizations from driving in the dark with no lights to having night vision. The above MITC chart tracks overtime as a percentage of payroll during a project to reduce unscheduled overtime. This chart can be produced at an organizational level to set standards, or at a departmental, divisional, managerial or individual cost center level. It can be used to track deviations from the norm and highlight under-performing units that are dragging down WWW.MITCSOFTWARE.COM 2

the organization. The same type of chart could be generated for payroll costs, variance to payroll budget, and billing revenue, etc. MITC rolls up information so that it is truly revealing. Data from a group of employees can be combined into departments, jobs, managers, divisions and more, so that actual costs can be identified by area. Employees who work in multiple roles or departments are seamlessly accounted for in the cost center where the work occurred. Data can be collected for any timeframe, and nonproductive events such as absenteeism can be tracked easily. MITC provides tools to direct the workforce intelligently, to channel decisions and actions towards the highest-level strategic goals, and to measure the organization s progress. When properly deployed, workforce management will save organizations money, increase productivity, and improve compliance. However, obtaining these achievements will only come with executive oversight and support for change. Not all of these factors apply equally or at all to every organization, but most organizations are impacted by these factors to one degree or another. TOTAL POTENTIAL PAYROLL SAVINGS Cost Factor Explanation Percentage Payroll error rate Productivity cost: replacement checks no longer issued. Actual cost: employees no longer overpaid). 1.2% Payroll processing time Productivity cost: time saved used for more productive tasks. Actual cost: administrative overhead is reduced. 0.47% Manually prepared reports Productivity cost: time saved is used for more productive tasks. Actual cost: administrative overhead is reduced. 0.75% Payroll inflation Actual cost 0.72% Timesheet fraud Actual cost 2.2% Absenteeism Productivity cost and actual cost: absenteeism no longer leads to excessive overtime 3.8% Total potential savings 9.0% Source: Nucleus Research Papers, How to use Time and Labor Management, Lisa Dissellkamp Not all of these factors apply equally or at all to every organization, but most organizations are impacted by these factors to one degree or another. WWW.MITCSOFTWARE.COM 3

IMPLEMENTATION PLANNING Some organizations roll out MITC with little or no planning and expect MITC to magically change the organization. Fortunately, some organizations do manage to achieve a well-orchestrated, strategic improvement without any planning. One CFO at an organization was surprised that overall payroll-related costs had been reduced by 2 percent after implementing MITC. The goal of the organization had been to eliminate paper timesheets and reduce administrative overhead. After double-checking the financial statements, the CFO was surprised but delighted. No one planned or projected any payroll-related savings but naturally everyone was very pleased when these savings were made - especially as budgets cuts were coincidently required shortly after rollout. However, the savings might have been even greater with forethought, planning and measurement. An expert at researching ROI from time and attendance systems, David O Connell said: If you are not doing a lot of cost accounting as a result of a time and attendance solution, then you re leaving money on the table. Managers need to review labor budgets daily or weekly, track activities, manage leave requests, and optimize schedules on a day-to-day basis. Executives need to review managers ability to achieve their goals, at least at the end of every pay period. Managing budgets should be a real-time process. Budget review can be a daily event. Workforce management budgets are not just something to be pulled up on a spreadsheet when there is a problem. Some organizations require managers to review employee activities against schedule and budget every day. Today s managers need the opportunity to investigate and take action to align expenditures and budgets. One of the first changes the executive made after implementation was to require managers to review budgets for each location daily. An alert report was designed that highlighted locations If you are not doing a lot of cost accounting as a result of a time and attendance solution, then you re leaving money on the table. that were a certain percentage under or over budget. Being under budget in this organization indicated that employees were not working sufficient hours, and they were jeopardizing the account and potentially causing service problems with the customer. Being over budget often indicated extra billable requests from customers to employees that might have gone unreported without daily intervention. Increased revenue as well as reduced payroll cost can often result from an effective workforce management deployment. Failure to act can be costly. The future of the organization is on the line. The executive at an organization who had resisted workforce management got a large invoice from one of his customers. On inquiry, the executive discovered the customer had required all of the contractor s employees to clock in and out on their time and attendance system. The invoice was for all the hours the contractor s employees had not worked when they were meant to. The executive had meanwhile paid all these employees for the non-existent hours of work. The customer gave the executive the choice to pay the bill and keep the account or give it up. The bill was so large that the WWW.MITCSOFTWARE.COM 4

contractor gave up the account, which represented 15% of the organization s revenue. Up-to-the-minute visibility of frontline management s deployment of the workforce will have a cumulative effect on organizational effectiveness. Achieving these goals may involve breaking some old habits and stepping onto some tricky political ground. People, practices, and processes need to be aligned. Meeting the needs of operations may conflict with the game plan that IT, Payroll and Finance have in mind. Chief Financial Officers (CFOs) tend to be very influential in time and attendance implementations and correctly, anxious to protect the integrity of their financial statements. A common mistake in time and attendance implementations is to build the reporting systems around broad financial measurements rather than lower level operational measurements. Program Management MITC Technology People Best Practices Processes Business Management Administration For instance, financial statements usually require reporting at a level that is summarized to make the big picture obvious or to comply with external reporting requirements. Operation managers often need to measure effectiveness at a lower level. Within a human service organization, a CFO will want to account for payroll costs as they apply to an entire program or department. Operational management needs to track the delivery of services and budget at the lowest levels. The time and attendance solution needs to be designed to achieve both goals. This helps shorten evaluation cycles, and for organizations in which billable hours must be submitted within time limits, heightened accuracy will increase revenue. Up-to-the-minute visibility of frontline management s deployment of the workforce will have a cumulative effect on organizational effectiveness. Ensure the payroll and accounting department does not hijack the time and attendance implementation. The smooth integration of time and attendance with payroll and billing is a vital component of any time and attendance implementation. But integration is the easiest and most predictable part. It is largely a technical process that can be guaranteed to succeed with an effective time and attendance solution. However, some organizations make the mistake of concluding the rollout at that point, when the greater goals of achieving better operational efficiency are ignored. These include: Using low-level budgets to control payroll and billing in real time Ensuring daily services are delivered as planned and on budget Deploying an effective scheduling solution to reduce overtime further WWW.MITCSOFTWARE.COM 5

Using scheduling availability reports to reduce overtime for predictable events such as statutory holidays Using self-service to engage employees and improve communication Using voice messaging, email, and text message alerts to provide managers and employees with the timely information that helps them be more effective and compliant Using no-show alerts and check awake call systems to improve service Integrating training and human resources Since workforce management technology is real-time, it is possible to know who is working at any given time at any location, and to notify management if someone has failed to show up. This can be vital for service organizations where employees are unsupervised, travel on their own to remote locations, or may be the only worker onsite. Any executive managing this situation can have nightmares worrying about attendance. The risk level is high. The reputation and revenue of the organization depends on a situation fraught with potential problems. Certain activities might even be a matter of life and death. It is critical that where these situations exist, executives ensure the workforce management system is fully utilized. In many situations, employees work overnight. The risk of employees leaving or sleeping is common. At one organization, an executive witnessed an employee turning up for work with a pillow. At another, a security guard at a construction site left the site. During their absence, an arsonist arrived and burnt down six luxury homes. The security guard s absence was reported by the fire department and the press. In another instance, an employee left a disabled client alone one night. The police found the client wandering the street at 2:00am. In these incidents, lawsuits and adverse publicity occurred. Executives managing locations operating 24/7 should consider implementing a check awake call system to minimize risks. The success of these precautions was amply demonstrated when The smooth integration of time and attendance with payroll and billing is a vital component of any time and attendance implementation. a missed check call alert went out to a manager at 3:00am. The manager responded. Calls to the location produced no response. The manager then drove to the site to find the employee had suffered a medical emergency. An ambulance was called for the employee. The client was unharmed. Using voice messaging and/or text and email alerts in association with telephone timekeeping, is a powerful way to motivate employees, ensure greater accuracy, and deliver important information regarding services easily and effectively. Examples include but are not limited to: Recording voice messages about a customer service issue or a personnel matter for a remote employee who will use the telephone to clock in. Recording voice messages for a specific location or client to be played to all employees who use the telephone to clock in at that location. WWW.MITCSOFTWARE.COM 6

Recording the names of locations and services entered on the telephone so that employees have an audible confirmation of what they entered and can re-enter if necessary. Entering text messages that are displayed on the PC when an employee clocks in. Using the front page of internet time and attendance applications to promote organizational goals and events. Using schedule prompting to remind employees of their next shift and to deliver work instructions. Sending HR email or text alerts to managers and employees for training, licenses, immigration visas, etc. Executives managing locations operating 24/7 should consider implementing a check awake call system to minimize risks. Operational improvements are the ultimate goal of workforce management. They drive productivity and effectiveness. While savings trimmed from payroll costs and payroll processing are fundamental, more significant benefits are derived when organizations operate more intelligently, improve quality of service, and avoid risks. A key to any implementation is to set measureable goals and ensure they are met. Examples might be: Eliminate paper timesheets for 100 percent of staff Improve attendance Eliminate all major payroll entries and calculations Reduce payroll-related costs by 2 3 percent Improve communication with staff CONDUCT AUDITS Tasks inevitably get omitted. Ensure an audit is scheduled at the end of the implementation and at least biannually thereafter or as organizational requirements change. MITC assists customers with a Functional Audit to ensure MITC is fully aligned with organizational goals and optimally utilized. A Lost Payroll Audit ensures that best practices are being followed and maximum return on investment is secured. This quality management process will reveal hidden benefits that can be optimized, new opportunities made available by changes in technology introduced since the original implementation, and systems that have been degraded, lost, or forgotten due to staff turnover. SEQUENTIAL OR PARALLEL IMPLEMENTATION PLANS For many organizations, it is possible and practical to break down the implementation of a new workforce management solution into discreet steps. A sequential implementation takes longer but may be less demanding and risky for an organization with limited resources and time. However, a parallel implementation of different aspects of the workforce management solution will be necessary in certain circumstances. These include: new regulatory requirements, budgetary pressure, external mandates, and the collapse of an existing system. An example of a sequential implementation might be: 1. Time and Attendance 2. Payroll Integration 3. Employee Scheduling While a parallel implementation would involve: 1. Time and Attendance and Employee Scheduling 2. Payroll Integration Executives will need to make the appropriate decision in consultation with MITC (there is no right or wrong way), then allocate resources, schedule implementation services, and budget accordingly. WWW.MITCSOFTWARE.COM 7

PARALLEL TEST OR PILOT PROGRAM APPROACH In the past, parallel testing and the big go live day was always recommended. Today, at least with time and attendance, this approach no longer works well. First, organizations are often already too lean or too busy to have staff do more work. Second, it is not effective when there is a wide gap between the new technology and the old system, which is often the case. Third, it is not necessary. Most organizations select a small but representative group of employees for a pilot program. Initially this is no more than 5-10 percent of the organization, and they choose managers who are on on board and motivated to make the change. The new solution is used from day one but only on a very limited scale. Initially, there will be issues. Employees may forget to use the system, and managers may not know exactly what to do. However, within a couple of pay periods these issues are resolved. During this same time, the payroll (and perhaps billing) departments are using reports to enter payroll while learning how to calculate gross payroll automatically. Once these steps have been completed, payroll integration can be implemented and the workforce management solution rolled out to other groups as fast as practical. During this period, the organization will be working closely with the software consultants, project coordinator, and project manager. Another benefit of a Pilot Program and gradual Roll Out, is that the organization receives immediate benefits (elimination of paper timesheets, reduced administrative time by streamlining the payroll process for a growing number of employees, controlled payroll cost for instance) in those areas where the new work force management solution is deployed. DEPLOY EVERYWHERE Don t leave out parts of your organization. Work to overcome obstacles in applying workforce management to your entire organization. Salaried staff, subcontractors and volunteers can all use time and attendance to the benefit of the organization. A 20 percent reduction is not uncommon simply by eliminating timesheet fraud and buddy punching. MINIMIZING OVERTIME Overtime reduction produces one of the fastest results from workforce management. It therefore merits special attention whenever overtime is a factor. There are many causes of overtime. Overtime cannot always be eliminated, but it can be significantly reduced. An overtime percentage of 2 percent of payroll is probably the best that can be achieved in certain circumstances. If overtime in any department in the organization exceeds 2 percent, executives need to concentrate additional efforts and resources in this direction. A 20 percent reduction is not uncommon simply by eliminating timesheet fraud and buddy punching. Executives should not be satisfied with just a 20 percent reduction when overtime is higher. Executives at some organizations have achieved reductions of 50 percent in overtime by focusing on additional issues such as: Ineffective scheduling with employees scheduled to work overtime in advance Repeat scheduling of employees already in overtime when positions open WWW.MITCSOFTWARE.COM 8

Unauthorized attendance Overlapping shifts Absenteeism (one employee s absenteeism is another employee s overtime) According to Circadian Technologies, overtime is 28 percent higher at organizations where absenteeism in high. Unplanned use of temporary or contract staff at higher pay rates to fill open positions Weak individual management skills in certain areas Slow reporting of terminations and ineffective hiring procedures At one service organization where overtime was a concern, executives introduced a reporting system that identified overtime that was not caused by extra customer requests. They implemented a quarterly bonus system for managers responsible for scheduling. The result was a significant reduction in unscheduled overtime, greater sharing of the available hours for all employees, and more full time, trained staff working a standard schedule instead of an unbalanced workforce with inadequate numbers of full time staff and a significant percentage of employees working overtime every pay period. Overall payroll costs were reduced and a more reliable, larger workforce created. At another organization, executives introduced a centralized scheduling system and relieved line managers of the responsibility of filling open positions. Managers could concentrate on their employees and the delivery of services. Centralized schedulers used an advanced scheduling solution to identify available, qualified staff and to avoid staff approaching overtime. The number of line managers was reduced as they spent less time working on manual schedules and trying to fill open positions. A team of professional schedulers was created who utilized resources from across the organization to fill open positions. As a result, there was no increase in overhead, and a significant reduction in overtime in departments that previously exceeded payroll budgets. At another service organization, an MITC audit showed that the organization had very little overtime in a department that traditionally had high levels of overtime as observed by the MITC Software Consultant on prior engagements. As this organization had failed to effectively implement a work force management solution in other areas (no budgets were established, no daily or even weekly review processes were in place, employee scheduling was not used to fill open positions etc), the software consultant probed. It turned out that all open positions were being filled by a third party at twice the average rate for an in-house employee. This practice had started some years ago during a labor shortage and had spread to the whole organization. It had continued even though the economic situation had deteriorated considerably and the shortage of qualified applicants was no longer a problem. The costs did not show up in payroll reports as they were being billed on invoices from the supplier of temporary labor Executives managing locations operating 24/7 should consider implementing a check awake call system to minimize risks. OVERTIME COSTING To correctly identify the source of overtime, it is important that the time and attendance solution does not simply cost overtime to the job or department where employees happened to go into overtime. This can result in the employee s normal department receiving the cost, and manual adjustments having to be made to maintain accurate cost accounting reports. The workforce management solution should be able to intelligently force overtime away from the employee s home department and into the department where it actually occurred, irrespective of the date of the extra work. WWW.MITCSOFTWARE.COM 9

OVERTIME CALCULATIONS Where employees are paid multiple pay rates within the same pay period, using a blended or weighted overtime rate will often lower total overtime costs while ensuring the organization is compliant. An employee or group of employees can challenge the way overtime is calculated if overtime is calculated on lower rates. Costly class action lawsuits have resulted from incorrect overtime pay calculations. In practice, employees will be more likely to volunteer for extra shifts or hours if the pay rate is higher, so most organizations pay the majority of their overtime on a higher rate. Using a blended or weighted rate ensures compliance and tends to lower overall costs. Many payroll departments are reluctant to consider changes to payroll rules during a time and attendance implementation, fearing employee resistance. In practice, most employees are anxious to be paid promptly, accurately and fairly. Introducing other changes often seems more natural to them when a system is changed and is better accepted than when the issue is forced by budget constraints or declining profitability. If executives are unsure of the potential savings, both methods can be used by copying time and attendance data into another database each pay period and a different method used in the two databases. One will be the main database and the other copy only for comparison for a limited period of time. BENEFITS OF SELF-SERVICE An important element of a workforce management solution at many organizations is employee and manager self-service. Executives should consider deploying self-service where employees have access to computers, smartphones or tablets at work, in the community, at libraries or at home. Direct cost savings come from improved payroll accuracy and significant reductions in the cost of managing these processes manually. The indirect savings are greater employee satisfaction, less interruption and manager time spent on administrative duties, and lower employee turnover. The most common areas executives focus on for employees are: Automated paid time off requests and rules Access to time off balances Ability to request a change to a timesheet Ability to request approval for a missing clock-in/out Email and text message alerts Training history and expiration notifications Employee schedule, job schedules, and open positions Online payroll check access, eliminating mailing direct deposit advice notices Not only does self-service make life easier and allow employees to focus on more productive efforts, it also enforces consistency and compliance because rules can be built into the process. Employees usually access this information through a link on the organization s website, driving employee traffic to the organization s website, where other communications can be easily presented to employees. In organizations deploying self-service, all employees usually visit the website at least WWW.MITCSOFTWARE.COM 10

once per pay period, often far in excess of that. One service organization whose workforce in summer is mainly in their late teens, noticed a spike in traffic to their website shortly after the main shifts started. It turned out to be from parents of the late teens, checking they had gone to work on time. In this case, the parents were also often consumers of the services being provided, so the access the organization provided generated a lot of free publicity. Not only does self-service make life easier and allow employees to focus on more productive efforts, it also enforces consistency and compliance because rules can be built into the process. A time off request can be initiated by an employee, automatically validated against the available balance and advance time rules, and rejected or accepted automatically. An approved request is sent to the employee s supervisor for approval, validated, and approved or denied with supporting documentation and without any emails or voice messages. Missing clock in /out Thank you for working on a holiday For managers, notifications can include the above for their employees plus: More hours worked than budgeted by job location Fewer hours worked than budgeted by job location More employees clocked in than scheduled Employee approaching overtime Optionally, access to self-service is also provided to other groups outside the organization such as: Customers (so they can see who is scheduled to visit their location) Guardians or parents Implementing an automated PTO system can prevent employees from taking paid time off they have not earned, and/or provided adequate notice for, without a manager having to be involved. This, in turn, can reduce overtime. Not providing sufficient notice forces schedulers to scramble to find a replacement, making overtime more likely. Automated email and text message alerts can also make a major contribution to communication and productivity. Schedule prompting for employees improves time management and can provide work instructions at the same time. Automated alerts for employees and managers can include improve morale and compliance. For employees, notifications can include: Training required Certification expiring Review due Immigration documents expiring Happy birthday Anniversary acknowledgement According to a survey by the American Payroll Association, organizations that use employee self-service realize savings as high as $250.00 per employee per year. WWW.MITCSOFTWARE.COM 11

WHY TRACKING ABSENTEEISM IS IMPORTANT Smart organizations learn to manage, forecast, and plan for absenteeism. Executives need to use workforce management to enforce compliance and tracking, and reduce the risk of absenteeism increasing costs and decreasing productivity. Planned absences can be handled through an advance notification system and intelligent employee scheduling. This reduces disruption to services and helps to match staff with the appropriate skills to the job. reached, an employee may be served a written notice, put on a personal improvement plan, or terminated. Tracking frequent offenders is a vital part of absentee management. Forgotten punches ( I forgot to clock in, The PC was not working, It would not read my hand punch, The phone did not answer ) sometimes represent deliberate attempts to conceal late attendance, which in turn can cause another employee to work overtime to cover the absenteeism. Compliance rates for employees and managers should be in the high nineties (that is, punches that require no edit). One organization conducting an audit for what appeared to be a well functioning time and attendance system discovered that certain managers were clocking employees in or out to avoid argument. Unplanned absences disrupt operations, imperil organizational effectiveness, cause delays, increase costs, decrease morale among co-workers, and can leave positions understaffed or completely unstaffed. Two-thirds of unplanned absences are non-illness related. A real-time response is required. All unplanned absences must be documented through the workforce management solution. Many organizations handle this through memo timecards that are entered by managers for the date and hours concerned with documentation as to the reason. One organization discovered that an employee had four grandmothers who all died in the same year. If a scheduling system is deployed in conjunction with time and attendance, no-show, unauthorized attendance, late attendance or early departure reporting is greatly simplified. Some organizations use a points system for poor and good attendance. Attendance issues that cause problems include unplanned absences, late or early arrivals, long shifts, short shifts, early or late departures, and unauthorized attendance. At each occurrence, the employee racks up points that may be redeemed by improved performance (on time attendance for a month, for instance). Points accumulate may be posted on the employee s online timesheet. After a specified number is Executives need to use workforce management to enforce compliance and tracking, and reduce the risk of absenteeism increasing costs and decreasing productivity. WWW.MITCSOFTWARE.COM 12

Managers who are authorized to perform edits should document the reasons. MITC will automatically identify any manual adjustments including who made it and when. If there is a genuine technical problem, it can then be identified and rectified before it becomes a popular excuse for all late arrivals. Once employees understand that there is a system in place, the temptation to try to slip past controls will diminish. Audit reports need to focus on repeat offenders at both the employee and managerial level. WHEN TO USE BIOMETRICS One of the critical success factors for any workforce management solution is the ability to address time theft. Industry estimates place intentional and error-driven time theft in the range of 1.5 to 10 percent of gross payroll. Biometric-based time and attendance solutions virtually eliminate a significant source of time theft, buddy punching, which is the practice of one worker to clock in/out for the other. Biometrics technology offers an effective method to address the buddy punching dilemma by directly linking an individual worker to a personal labor record. Organizations of all sizes are increasingly implementing automated workforce management systems that incorporate biometric technology. However, there is sometimes some confusion as to when and where to use biometrics. The additional hardware cost, maintenance issues, and internet access become justifiable for locations where more than 5-10 employees share the same biometric time data terminal. Alternatively, employees can pass the phone (clock in/out on one phone call), be clocked in/out by a supervisor, or use a PC to lower costs. Optimizing Billing A workforce management system is often used to integrate time and attendance activity with billing. Examples are: In-home care Security services Client attendance at day programs Biometric-based time and attendance solutions virtually eliminate a significant source of time theft, buddy punching. Billing can often be more complicated than payroll, more timeconsuming, and require the attention of skilled staff to ensure that complex calculations relating to multiple services per day and caps on hours of service are observed. This may apply to hundreds of clients. An effective workforce management solution can combine collecting payroll and billing, simplifying the process, making it possible to reconcile clients served with time paid, reducing the risk of erroneous billing records, and at the same time automating and streamlining the billing process. In many situations, the funding source will only reimburse so many hours a day, month, or year, and may require billing in units. Organizations need to know whether the services have been delivered to plan to avoid over or under billing. If the hours of service will not be known until after payroll is processed, it is much too late to affect the outcome. With a real time system, it is much easier to make sure none of the potential revenue falls through the cracks. Hours of service can be tracked daily, weekly, monthly, and against plan of care, with all information updated as the services are provided. WWW.MITCSOFTWARE.COM 13

In addition, Activity Documentation allows employees to eliminate paper case notes and to report on clock-out all the services provided in response to simple Yes/No questions. With client attendance at day programs, usually no payroll is involved but attendance and billing records are required with all the related calculation and data entry overhead. With clients who are disabled or medically restricted, staff will usually take attendance using a PC, tablet or mobile infrared scanner with bar codes, eliminating paper records. Just as with payroll, on verification of attendance, a workforce management solution adapted for billing can eliminate manual calculations and data entry. from improved scheduling. Productivity gains are also achieved by reducing the time spent on scheduling A separate but related implementation plan is often required, as changing poor scheduling habits (always using the same staff) may require time and effort. At some organizations, parents or guardians are encouraged to clock their children in and out using time and attendance technology to reduce the administrative burden on the organization. At clock-in, messages can be automatically delivered to the parent or guardian. USING WORKFORCE SCHEDULING Employee scheduling is a skill that is rarely taught but that directly impacts the efficiency and productivity of many service organizations, especially those where positions must be filled. Other MITC publications cover this important topic in more depth. They include: How Effective Scheduling Delivers Return on Investment Optimal Scheduling Procedures What Service Organizations Need to Know to Implement a Scheduling Solution Why use Employee Scheduling? The important fact for executives to consider is that in organizations where overtime is an issue, potential savings are derived partly from eliminating timesheet fraud and partly INTEGRATING TRAINING Maintaining accurate training records is a major burden for many organizations. Training records are not often integrated into time and attendance. Some organizations maintain separate databases of employees for payroll, human resources, scheduling and training. This plethora of systems has usually evolved over time in response to problems or regulatory challenges. Fortunately, today s training can be integrated into a single workforce management solution. Employees should clock in and out of special cost centers set up for training classes. A PC can be located in training rooms, or staff at remote locations can use a telephone. This will eliminate paper training attendance records and ensure staff attending training classes are paid correctly WWW.MITCSOFTWARE.COM 14

Training attendance records then flow not only to payroll but to training history records where documentation relating to pass/fail, scores, comments and more can be added If self-service is implemented, training alerts can be communicated to staff by email or text message alerts or at clock-in on the telephone or PC before certification expires Managers can be alerted automatically in advance of their employees certifications expiring Optionally, staff with expired training certifications can be automatically prevented from clocking in or being scheduled SHOULD SALARIED EMPLOYEES USE TIME AND ATTENDANCE? Salaried employees as well as hourly paid employees need to use time and attendance, if for no other reason than it is egalitarian, demonstrates the organization s commitment to effective workforce management for all, and helps motivate all employees to comply. Salaried employees need to report to the workforce management system daily to validate their work hours. In addition, salaried employees visiting remote sites to train employees, perform inspections, etc., should be required to confirm their attendance at these sites. If salaried employees are only required to report exceptions, there is a serious risk that sick time, long lunch breaks, and other time off will not be reported. Non-reporting incentivizes salaried employees to abuse their privileges. Another consequence of underreported time off is that salaried employees will continue to retain their time off, increasing the liability for unused time off payouts when employees leave or retire. Non-reporting incentivizes salaried employees to abuse their privileges. TRACKING SUBCONTRACTORS AND VOLUNTEERS Many of the same issues apply to subcontractors as to employees. Subcontractors and volunteers perform services vital to some organizations. Subcontractors need to be reimbursed for services promptly and efficiently. Volunteers may need records of their attendance for credit, or the organization may need the records. Regardless of the situation, the organization has the same obligation to its clients to provide the services it was contracted to provide. Many organizations require subcontractors to clockin and out, to be monitored by no-show alert technology, and to listen to voice messages just as they require their employees to do. In addition, attendance records can be compared with invoices received to ensure that hours of services subcontracted are performed. OPTIMIZING BILLING A workforce management system is often used to integrate time and attendance activity with billing. Examples are: In-home care Security services Client attendance at day programs Billing can often be more complicated than payroll, more timeconsuming, and require the attention of skilled staff to ensure WWW.MITCSOFTWARE.COM 15

that complex calculations relating to multiple services per day and caps on hours of service are observed. This may apply to hundreds of clients. An effective workforce management solution can combine collecting payroll and billing, simplifying the process, making it possible to reconcile clients served with time paid, reducing the risk of erroneous billing records, and at the same time automating and streamlining the billing process. In many situations, the funding source will only reimburse so many hours a day, month, or year, and may require billing in units. Organizations need to know whether the services have been delivered to plan to avoid over or under billing. If the hours of service will not be known until after payroll is processed, it is much too late to affect the outcome. With a real time system, it is much easier to make sure none of the potential revenue falls through the cracks. Hours of service can be tracked daily, weekly, monthly, and against plan of care, with all information updated as the services are provided. In addition, Activity Documentation allows employees to eliminate paper case notes and to report on clock-out all the services provided in response to simple Yes/No questions. With client attendance at day programs, usually no payroll is involved but attendance and billing records are required with all the related calculation and data entry overhead. With clients who are disabled or medically restricted, staff will usually take attendance using a PC, tablet or mobile infrared scanner with bar codes, eliminating paper records. Just as with payroll, on verification of attendance, a workforce management solution adapted for billing can eliminate manual calculations and data entry. At some organizations, parents or guardians are encouraged to clock their children in and out using time and attendance technology to reduce the administrative burden on the organization. At clock-in, messages can be automatically delivered to the parent or guardian. Managers should be encouraged to use fixed and free form comments within the workforce management system. DOCUMENTING ISSUES It is always important to know the reason why problems occur. From a management, executive or audit perspective, tracking reasons for problems can shorten investigations, eliminate time wasted chasing imagined problems, and focus attention on the real issues. Managers should be encouraged to use fixed and free form comments within the workforce management system. Fixed comments use a predefined table that can be used later for reporting. A good example is absenteeism. A table might include car broke down, traffic, family emergency, bereavement, weather, no-show, no-show, and no-call, etc. A memo timecard can be entered by the manager, which will appear in the employee history and can be reported in the event of frequent or repeat occurrences. These comments allow for standardization across the organization as all managers use the same set of codes. Free format comments allow managers to enter a short explanation with the timecard such as Bob called me as soon as he could. This information can be attached to existing payroll timecards, or zero timecards can be created, if appropriate, with a nonpayable pay type, zero pay rate and zero hours. WWW.MITCSOFTWARE.COM 16

WHAT TO DO IF THERE IS A PROBLEM DURING DEPLOYMENT The absence of return on investment from workforce management indicates an incomplete, immature, or a narrowly deployed solution. Questions to consider are: CONCLUSION An effective time and attendance system helps to improve the overall efficiency of the operation. Following these guidelines will help to ensure your workforce management solution is properly implemented and aligned with the organization s goals. 1. Has the system been universally deployed? 2. What is the compliance level? 3. Could workflow practices be changed? 4. Are controls in place to account for labor costs where they occur? 5. Are managers accountable for under/over spending? 6. Are budgets reviewed daily? 7. Is scheduling used effectively? 8. Are all payroll and billing rules automated (are edits still being done)? 9. Has the organization changed to the extent that the original implementation is no longer aligned with organizational goals? To answer these questions, conduct an audit of how the system is deployed and gather new data. 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 17