Addressing common challenges in employee time tracking

Time is the most valuable resource— it waits for no one. Effective time management is the backbone of any business. As the saying goes, "time is money," but it is also the one thing that we can never buy more of.

Ineffective time tracking can result in lost productivity, or employees experiencing lack of focus, stress, and burnout. Time needs to be used efficiently and wisely. To succeed as a manager, you must learn the art of time management (and implement the right software tools to keep track of employees' hours and productivity).

Are you running a business?

Accurate time tracking can open a world of possibilities, allowing you to optimize operations, maximize efficiency, and achieve your financial goals. Similarly, improper time utilization or time theft by employees can result in unnecessary delays, disruptions, and financial losses.

To overcome these challenges, let's dive into the issue of time theft and its costs.

The cost of employee time theft

According to the American Payroll Association (APA), almost 75% of businesses in the U.S. suffer from time theft.

What is time theft?

Employees commit time theft when they receive compensation for hours they haven't actually worked.

Key facts:

1. Employers in the US lose more than $400 billion in productivity due to time theft every year.

2. More than 40% of hourly workers are believed to commit time theft.

3. Each week, time theft costs employers about 4.5 hours per employee.

Do you need a new time tracking solution?

Keeping these time theft statistics and facts in mind, it is important for every employer to take the right steps to mitigate these behaviors. Establishing an effective time tracking system helps prevent time theft and ensures accurate compensation for your employees.

What is time tracking?

Time tracking refers to the process of monitoring the amount of time each worker spends on their day-to-day tasks (and thus, needs to be paid for). Employees may clock in and out daily or submit timesheets at the end of the week. Whichever way your staff tracks their time, it is important to have a reliable process.

Time can be tracked on paper or using simple spreadsheets, but ideally, you want a tool that not only tracks time but can be used to generate reports on your team's productivity. This is why many businesses implement more specialized time tracking software.   

Popular time tracking methods and challenges

1. Paper timesheets:

Paper timesheets require workers to manually record their working hours on a standardized form. Although it may seem like a simple option, there are several issues with this method. Employees may struggle to consistently record their working hours accurately, leading to errors and inaccuracies. Employees may also forget to record their hours, leading to problems in payroll processing and compliance issues.

As a manager, it would be a time-consuming task to verify and manually approve these handwritten timesheets every time payroll needs to be processed. As a business owner or manager, it would be difficult for you to generate reports and analytics, and you may miss opportunities to gain valuable insights and better understand your operations.

2. Spreadsheets:

With the spreadsheet method, staff record their working hours on a digital spreadsheet template. Relying on spreadsheets for team members can disrupt operations and create staffing challenges. While it's more organized than paper timesheets, it still requires manual data entry and can be prone to errors.

Spreadsheets limit oversight for managers and do not provide real-time visibility into employees' work hours. They rely on employees to self-report their hours accurately, which may not always happen. Spreadsheets may not be able to handle exceptions, such as sudden absenteeism, overtime calculations, or tracking time for all schedules simultaneously.

3. Swipe card systems:

Swipe card systems require electronic keycards or badges that staff swipe through a card reader or access control terminal. Whenever an employee swipes their card to start or end their shift, the system records the date and automatically logs the worker's hours. Swipe card systems offer greater accuracy compared to manual entry. But swipe card systems add expenses, like installation, card readers, and software, so it is not a cost effective option for SMBs. Collecting and storing data from swipe card systems also raises data privacy concerns. Organizations must adhere to data protection regulations and secure the data to prevent unauthorized access.

The biggest challenge could be when employees share their swipe cards with staff members, allowing others to clock in or out on their behalf. This practice can be difficult to detect unless the system has additional security measures in place. Buddy punching causes significant lost productivity and wasted wages for businesses.

Solution: Upgrade your time tracking software

Time tracking software helps you automate the process of tracking employee hours. With a robust solution like Zoho Shifts, employees can clock in and out using the web or a mobile application with geo-fencing to ensure accuracy and prevent buddy punching.

According to a study, the time tracking software market is expected to reach $47 billion by 2030. This highlights that more and more businesses are using time tracking software in various industries.

How can time tracking software save your money?

The right staff time tracking software can save you money in several ways, making it a valuable investment for businesses of all sizes.

Let's take a closer look at how time tracking software boosts your bottom line:

1) Reducing labor costs: Accurately tracking employee logged hours on a weekly basis can help you immediately identify and address any discrepancies or unauthorized work, preventing unnecessary labor expenses.

Over time, consistent monitoring and control of labor costs can lead to substantial savings. This process can help you optimize staffing levels, allocate resources efficiently, and minimize costs for your businesses.

2) Overtime management: Monitoring overtime hours on a weekly basis allows businesses to adjust schedules to reduce the need for costly overtime pay. Effective overtime management can lead to substantial annual savings by ensuring that overtime is only used when necessary. This helps minimize total payroll costs.

3) Efficient scheduling:
Time tracking software helps create more efficient weekly schedules by analyzing historical data and aligning shifts with the hours when your business experiences peak demand. This ensures that you have the right number of employees on duty without overstaffing. Efficient scheduling reduces the need for additional staff during busy periods and prevents overstaffing during slower times.

4) Productivity improvement:
Businesses can improve productivity by tracking employee hours and tasks weekly. Identifying and reducing time spent on unproductive activities can lead to immediate savings. Over the long term, using data and reports from time tracking software can lead to significant cost savings.

5) Compliance and legal savings:
Time tracking software helps ensure that businesses comply with labor laws and regulations, reducing the risk of legal issues and associated costs. Due to the high cost of defending lawsuits or paying fines imposed by regulators, avoiding labor law violations is a huge benefit to any company.

Start tracking your employees' time more effectively

Using the right tools for employee time management, tracking, and reporting gives you accurate data that you can use to improve resource allocation and employee productivity. Effective time management and tracking are crucial for businesses of all sizes to make informed decisions. Time tracking software contributes to overall efficiency within organizations by helping businesses work smarter to achieve their goals.