White Paper Time and Attendance Strategies for the Modern Workforce Moving beyond yesterday s solutions in workforce management
Executive Summary Organizations today are operating in a period of breathtaking technological change and integration. Technologies that were viewed as groundbreaking only five or 10 years ago are now deemed almost out of date. From separate devices such as the ipod, GPS units, and digital cameras, we ve seen the emergence of the iphone and tablets that contain all of that functionality and more in a single device. Users have become accustomed to an unprecedented level of ease and access with regard to the information they need in their personal lives, and this trend is driving expectations in business applications and communications. The result is a new generation of workforce management solutions for today s modern workforce. With access to technologies that are easy to use, personalized, and intuitive, employees are happier, more productive, and require little if any training to navigate tools. Leading to a fundamental shift in the ways in which organizations manage the workforce. Along with the recognition that solutions must adapt to the modern workforce, organizations are learning that the way they implement workforce management solutions can play a critical role in success. Recent research presents compelling evidence that the integration and automation of time and attendance with key workforce management processes is a true driver of performance. According to the Aberdeen Group, integration with payroll, scheduling, and leave management distinguishes best-in-class organizations from average performers and laggards. 1 Aberdeen identified three critical factors for best-in-class success: 2 Integrating time and attendance with payroll, HR, scheduling, and leave management to drive performance Improving employee engagement and accuracy with self-service access to timesheets, schedules and HR information Having visibility into time data, utilizing business intelligence tools, and integrating with business data for improved decision making By integrating time and attendance with other workforce management functions, companies can support organizationwide and global initiatives and take advantage of emerging technology trends such as easy-to-use consumer-oriented user interfaces and dashboards, cloud services, and mobile access. The proof is in the results. Best-in-class companies are achieving stunning performance in their efforts to manage time and attendance. How Does Your Performance Compare to Best in Class? 3 0.5% error rate in payroll 0.5% error in time tracking 0.6% error rate in earned time/paid time accruals 9% improvement in compliance scores 1-3 Jayson Saba, Time and Attendance Strategies (Aberdeen Group, 2011), 2. 2
Consumer products are changing the landscape Technology products have made tremendous advancements in recent years. What was once considered cutting edge is now generally accepted as commonplace and maybe even outdated. Our expectations for how we interact with these devices have also changed. Just a few years ago it was common to use a laptop to work remotely and access the Internet. Mobile phones were ubiquitous and smartphones were increasing in popularity. Digital cameras made it easy to share photos online. Portable game systems offered high-definition graphics. We carried portable CD players and copied music to MP3 players and ipods. GPS navigation systems were becoming more widely used. Fast forward to today, when an Android, iphone, or ipad delivers all of that functionality in a single device. Features can be personalized for each user, and applications are so user friendly that manuals and documentation have almost become a thing of the past. And one multifunctional system is much more affordable than several single-function devices. As a result of these changes, today s business users have a fundamentally different attitude toward workplace technology: They have been rewired to expect everything they touch to do more in a more intuitive way, and they want it personalized to their needs They want instant access to everything They want to manage work from anywhere They want a simple, easy-to-understand user experience With technology dominating every aspect of their [millennials ] lives, it is perhaps not surprising that 41% say they prefer to communicate electronically at work than face to face or even over the telephone. They routinely make use of their own technology at work and three-quarters believe that access to technology makes them more effective at work. 4 Pressures are coming from inside and out Aberdeen has found that the uncertainty surrounding the economy is still forcing organizations to confront cost control through efficiencies and more optimized deployment. Other challenges reported by survey respondents include meeting changing customer expectations and using time and attendance data in tandem with business performance, enabling decision makers to optimize staff deployment and improve business processes. 5 72% 51% 25% Economic pressures forcing cost control Changing customer demands driving better staff allocation Regulatory requirements or union agreements FIGURE 1 Top pressures driving workforce management 6 4 Millennials at work: Reshaping the workplace, PwC, accessed January 16, 2012, http://www.pwc.com/gx/en/managing-tomorrows-people/future-of-work/key-findings.jhtml. Survey of 4,364 recent university graduates about their expectations of work. 5-6 Saba, Time and Attendance Strategies, 4. 3
Among the barriers to efficiency that come from within is a lack of process and policy standardization across the enterprise coupled with the inability of business leaders to leverage workforce data to drive better operational results. Bringing your time and attendance up to date It s simple, really. Outdated time and attendance systems are painful. For managers, employees, and the business. Errors increase costs and compliance risks. And because outdated systems fail to leverage new technologies, they are difficult to navigate, leading to low user adoption rates. Organizations that are still using simple time and attendance solutions, or worse, relying on manual, semiautomated, or disparate systems could be falling behind the times. By automating and integrating workforce management processes, you can increase visibility and control of labor costs and mitigate compliance risk. 48% 41% 36% Inability to leverage workforce data to make better decisions Too much time spent on manual transactions Data integrity lack of high-quality data or multiple/ disparate data sources FIGURE 2 Internal HR and payroll challenges 7 The lack of integration with other systems, such as payroll, HR, absence management, and scheduling, makes it almost impossible to get a single, trusted view of data, forcing managers to make decisions based on incomplete, inaccurate, and often anecdotal information. This lack of visibility and control hampers the organization s ability to respond quickly to changing business conditions. Other challenges include difficulties operating across a global environment and increased challenges with legal, union, and regulatory compliance. Tracking time with spreadsheets? Eighty-eight percent of spreadsheets with more than 150 rows contain errors. 8 Could you be a laggard? The mature, integrated use of automated technology contributes significantly to whether an organization can be deemed best in class, average, or a laggard. The Aberdeen study shows that workforce management tools have a positive impact on productivity, efficiency, and compliance. How do you compare? Best in Class 9 0.5% error rate in payroll 0.5% error in time tracking 0.6% error rate in earned-time/paid-time accruals 9% improvement in compliance scores 7 Jayson Saba, The Future of Core HR (Aberdeen Group, 2010), 5. 8 Raymond Panko, What We Know About Spreadsheet Errors (University of Hawaii, May 2008). 9 Saba, Time and Attendance Strategies, 6. 4
The difference between best-in-class organizations and those that don t measure up also extends to the hardware that supports workforce management functions. Thirty-four percent of all surveyed organizations still use a fixed-mount time clock, 32 percent are using the phone to capture absences, and 31 percent still use spreadsheets. In contrast, best-in-class organizations are 67 percent more likely than their counterparts to use mobile access to punch in via a wireless device. 10 Striving for best in class As we noted earlier, best-in-class organizations use time and attendance data to drive strategic business decisions that further their long-term goals. These leading companies share a number of common characteristics, including: 11 Automating timekeeping and leave management processes and integrating these systems with payroll Utilizing analytics and reporting tools to leverage time data to make better deployment decisions Empowering employees and managers to be self-sufficient through self-service We expect to see significant movement in transforming key processes, including performance management, as well as adoption of mobile and social technologies for processes such as recruiting, workforce management, and learning. 12 Forrester Research Integrating your time and attendance with payroll, HR, scheduling, and absence management is critical to your ability to drive performance. This integration empowers self-sufficiency through access to timesheets, schedules, and HR information, improving employee engagement, manager productivity, and accuracy. And with full visibility into time and attendance data, you can use business intelligence tools to plan for growth, innovate, and foster continuous improvement. The workforce technology adoption curve The level and complexity of the technology you ve adopted determines where your organization falls on the workforce technology adoption curve, and more importantly, provides a roadmap for steps you can take to improve. As organizations move from laggard to best in class, they continue to automate and integrate workforce management processes moving beyond just time and attendance data to full integration, self-service, and analytics. The strategy for reaching your fullest workforce potential includes: 10 Saba, Time and Attendance Strategies, 17. 11 Saba, Time and Attendance Strategies, 2. 12 Forrester Research, Inc., Trends 2011: HRM Processes and Applications Move Ahead Despite Mixed Employment Outlook, January 2011, http://www.forrester.com/rb/research/trends_2011_hrm_processes_and_ applications_move/q/id/57458/t/2?src=rss_customfeed&cm_mmc=forrester-_-rss-_-document-_-7. 5
Automating and streamlining processes such as time and attendance, HR, payroll, data collection, and absence management to control labor costs and minimize compliance risk Planning strategically with forecasting, scheduling, and hiring tools that help you get the right employees at the right time and improve productivity Executing your strategy to create operational excellence by leveraging easy-to-use tools and mobile technology that help guide decision making Innovating through analytics and budgeting to plan for growth and gain visibility and control to foster continuous improvement Data Collection Going beyond time and attendance to integrated workforce management Transactional Laggards Average Best in Class Payroll Timekeeping HR Absence Hiring Scheduling Labor Analytics Self-Service Activities/ Labor Costing Automate and Integrate The Foundation of Workforce Management FIGURE 3 The workforce technology adoption curve Operational Excellence Most organizations implement time and attendance systems to address a common business pain. It may be to control labor costs. It may be to improve payroll accuracy and efficiency. Whatever the business driver that leads to the investment, the data collected is primarily used for paying employees and tracking their work time. However, there is a lot more value in this data than just punch-in and punch-out information. Best-in-class companies track and analyze the data between the punches and use this valuable information to reduce employee turnover, improve business productivity, and help transform business processes. When organizations integrate workforce management processes, high-quality information becomes a reality. This data represents a single version of the truth, allowing you to integrate analytical tools to get instant access and visibility and make fast, accurate business decisions. By further engaging the workforce with self-service, you actively empower your employees increasing employee engagement, improving satisfaction, and significantly reducing the number of manual transactions. The end result allows you to control labor costs, minimize compliance risk, and improve workforce productivity. The roadmap to best in class 13 Gain senior executive buy-in for the importance of time and attendance strategy and tools in achieving business goals Provide operational managers access to technologies to leverage time data to improve decision-making ability Continue to automate and integrate systems to increase accuracy and relieve HR and business unit managers of manual workflows 13 Saba, Time and Attendance Strategies, 2. 6
The impact of technology trends As your organization moves toward best-in-class workforce management, IT can be a proactive business partner in driving growth and innovation. Emerging trends such as ease of use, mobile access, and cloud computing are helping organizations increase responsiveness to user and business requirements and speed reaction times for greater competitiveness. Make it easy The easier the solution, the higher the adoption rate. And without high user adoption rates, you re not going to achieve increased productivity, reduced labor costs, and minimized compliance risks. Some of the hallmarks of usability and ease of use include: Consumer-oriented interface Easy access Personalization Integrated external content The information users want to see, when and how they want to see it According to Gartner, fewer than 30 percent of the potential users of organizations standard business intelligence tools use the technology. 14 Make it mobile Mobile management empowers managers and frontline employees by enabling real-time communication that connects them to each other. The generation of employees entering the workforce has become accustomed to iphone-like ease of use and instant access to information. Dated, cumbersome technology solutions are likely to face low user adoption and satisfaction rates. Mobile technology can play a critical role in improving your workforce processes: Improve collaboration and communication Submit time-off requests, approve timecards, submit punches, and more Resolve exceptions and respond to employee requests in real time Use employees smartphone preferences to access familiar applications Leverage the GPS capabilities of your smartphone to track punch locations Use the cloud Rather than committing in-house resources, consider using cloud computing to take the burden of hosting and managing workforce management applications off your shoulders. The many options available today make technology solutions attainable for a business of any size. And with cloud and SaaS services, you can realize the added advantage of freeing your IT staff to focus on implementing other strategic projects. 14 Gartner Says Consumerization of BI Drives Greater Adoption, Gartner, Inc., July 20, 2011, http://www.gartner.com/it/page.jsp?id=1748214. 7
Commissioned Forrester study identifies significant savings and benefits: What you can expect to attain Automating workforce management functions like time and attendance, HR, payroll, absence management, and scheduling enables companies to reduce costly payroll errors, increase payroll staff productivity, and reduce payroll costs. To validate this, Kronos commissioned Forrester Consulting to conduct a study examining the total economic impact and potential return on investment organizations may realize by deploying the Kronos Workforce Central suite. Using a composite organization based on in-depth interviews with four Kronos customers, Forrester identified the following savings: Composite Organization Three-Year ROI 15 ROI Payback Period Risk-Adjusted Estimate 85% 13.9 months Original Estimate 119% 11.6 months Saving Millions Forrester estimates riskadjusted three-year savings at $3.9 million. 16 The Forrester study also revealed the following benefits: Increased staff productivity. Organizations using Workforce Central can expect a significant increase in general productivity of corporate HR and payroll staff, timekeepers, and supervisors or managers tasked with regular timekeeping and scheduling activities for hourly workers. Three-year benefit: $1,501,875 for the composite organization. 17 Reduction in payroll inflation. Users of Workforce Central can also expect to increase control over clock-in and clock-out practices by hourly employees such as early ins, late outs, and buddy punching. Three-year benefit: $1,121,538 for the composite organization. 18 Reduction in controllable overtime spend. Forrester also found that organizations can benefit from the improved labor management analytics of Workforce Central and reduce the amount of controllable overtime spend. Three-year benefit: nearly $1 million for the composite organization. 19 Reduction in payroll error. Improved data accuracy arising from manual data entry and administration of time and attendance and payroll information. Threeyear benefit: $347,794 for the composite organization. 20 The Workforce Central suite provides state-of-the-art solutions to help manage all aspects of workforcerelated functions and processes, including time and attendance, scheduling, absence management, human resources, payroll, hiring, and labor analytics. The suite of fully integrated solutions is 100 percent web-based, available as an on-premise licensed installation, managed (cloud) services, or a hosted solution. The solution s flexible deployment allows it to meet unique business needs. 15 Forrester Consulting, The Total Economic Impact of Kronos Workforce Central Suite, a study commissioned by Kronos Incorporated (Forrester Consulting, September 2011), 2. 16-20 Forrester, Total Economic Impact, 3. 8
Summary Aberdeen found that nearly 60 percent of the organizations it surveyed have implemented automated timekeeping. 21 While important, this step is not enough. Truly successful organizations go beyond simple automation to integrate HR, payroll, scheduling, and absence management; deliver self-service; and use analytics to drive decision making. They leverage technology solutions that are easy to use, are accessible where and when they are needed, and fit within each organization s budget and IT requirements. This kind of single, centralized workforce management solution gives organizations a foundation for operating to their fullest workforce management potential. How do you compare to best in class? Go to www.kronos.com to learn more about workforce management automation.... true success lies in leveraging self-service tools, analytics, and integration with other core systems, specifically scheduling, payroll, and leave management. Ultimately, the goal is to drive business performance, where alleviating tactical burdens on stakeholders and leveraging valuable data are the main ingredients of the recipe for success. Jayson Saba Aberdeen 21 Saba, Time and Attendance Strategies, 2. Kronos Incorporated 297 Billerica Road Chelmsford, MA 01824 +1 800 225 1561 +1 978 250 9800 www.kronos.com 2012, Kronos Incorporated. Kronos, the Kronos logo, and Workforce Central are registered trademarks of Kronos Incorporated or a related company. All other product and company names are used for identification purposes only and may be the trademarks of their respective owners. All specifications are subject to change. All rights reserved. CV0111-USv1