Employee time clock software and its significance

Picture this: you are running a small business with 10 employees and have been manually tracking your employee work hours. The business continues to grow steadily and so does the number of employees in the company. Tracking employee work hours becomes harder and more time-consuming. Errors start to creep in, and you realize the errors are proportionately increasing with the employee count.

When businesses are working on a smaller scale, it is easier to keep track of time manually. As the company grows, the manual effort required for tracking increases just as much. The added effort required can cause errors in the timesheet data. According to this survey by WorkPuls, four out of five paper timesheets have to be corrected for 80% of the businesses that use paper timesheets.

Be it a small or large business, timesheets are an integral part of all types of businesses. It is vital to keep track of time if you want the business to succeed. As someone who is running the organization, it is important to implement the right time-tracking tool as it can directly impact the profitability of the company.

Different types of timesheets

Businesses use different methods to keep track of employee hours based on their needs and preferences. Here are some of the commonly used timesheets:

Paper

This is one of the most common methods to track and manage time. Employees use a sheet of paper to enter the clocked hours manually or a punch timesheet to record the clock-in and clock-out times. Using paper to track time is still prevalent in many businesses worldwide. 38% of the companies in the US still make use of paper timesheets. While this method has been extensively used over the years, this method comes with numerous flaws.

Time that can be spent productively is often spent keeping track of time. With so much of human intervention in the tracking process, it can lead to a lot of errors. This can in turn have financial implications for the company, with companies either over or underpaying their employees.

With data recorded on a piece of paper, there is always a possibility of misplacing this paper. This will result in the loss of all tracked data. This method of tracking also expects employees to operate in good faith and fairly enter the clocked hours. There is a possibility they can take advantage and manipulate the data for their benefit.

Spreadsheets

The use of spreadsheets to keep track of time is still common in many smaller businesses. This is a step up from the traditional paper timesheets but its efficiency is also questionable as the business grows.

Even though there is a level of automation that comes with using spreadsheets, there is still a lot of human intervention that can result in errors. Since there is no concept of punch-in and punch-out in this method, there's a chance the employees forget to enter the clock-in or clock-out details.

With multiple employees using the same sheet to input the data, it can result in misuse of this access by editing the sheets or deleting certain sections of the sheet by mistake.

Employee time clock software

If you are looking to overcome the shortcomings of using paper, punch cards, and spreadsheets, time clock software is your go-to solution. Many of the employee time clocks come as part of an employee scheduling software like Zoho Shifts. Businesses can use this solution to keep track of employee hours electronically with minimal human intervention. This will reduce the number of errors usually associated with other methods of tracking time.

Consequences of timesheet errors

With the paper and spreadsheet time tracking method having its inaccuracies, the impact of these errors can be significant and could have major repercussions. Employees will not get the pay they deserve and in some off chances might end up getting overpaid. There's also a chance it could put the company in legal trouble. Here are some of the ways timesheet errors can impact both the employee and employer in a workplace:

Varied labor costs decrease morale

Inaccurate time clock data can result in employees not getting paid a fair amount. Hard work going unrewarded can make employees feel they are mistreated and bring down their morale. Apart from the financial impact, the mental state of the employees will also take a hit. This will directly impact the work output of the employees. Nobody will be willing to put in their best effort if they are not paid enough for it.

Over-payment, on the other hand, directly impacts the organization. Sending out more than the stipulated amount may have major ramifications for the company. It can affect the company's finances and the plans they have. Miscalculations like this can result in inaccurate company finances. This can affect the overall profit numbers and can create unrest among the shareholders.

Broken employee-employer trust

When timesheet errors occur either from the employee or the employer, it can strain the relationship they have. Employees committing a timesheet error can result in employers starting to second guess every time entry. This lack of trust can impact the overall morale and mood in the workplace. Employees are expected to ensure perfection in their records while employers have to check the legitimacy of the records constantly. The emotional implications of this are pretty significant. This doubt can impact the mental health of both the employee and the employer.

Possible legal implications

The company can land in legal trouble if they do not fairly compensate the employees. According to the Fair Labor Standards Act (FLSA), there is a list of records that employers have to maintain. This includes hours worked each day, each week, hourly pay rate, and more. Having errors in the timesheets can put the company in a position where they could face potential lawsuits both for exploitation and negligence in record keeping. Being on the receiving end of such lawsuits directly affects the reputation of the company and can give companies negative publicity that they don’t need.

What are employee time clocks?

As businesses continue to evolve, it is important to use the necessary technology to stay ahead of the competition. As we have mentioned above, employee time clocks solve most of the shortcomings of paper timesheets and spreadsheets.

Employee time clocks provide employees a simple option for clocking in and out of work. They accurately keep track of the work hours of employees. This ensures employees are paid the right amount for the time they have worked. Employee time clocks minimize errors in timesheets and cases of time theft. This can help save valuable money and time for both employers and employees.

There are different types of time clocks available. Biometric time clocks, card swipe clocks, keycode-based time clocks, web-based time clocks, and mobile time clocks are some of the main time clock devices. To make it more convenient for businesses, apps like Zoho Shifts offer web, mobile, and keycode-based time clock capabilities in one app.

Perks of using time clocks in the workplace

Keeping track of employee hours comes with a host of benefits for the employer. Here are some of the benefits companies get when they implement the right employee time clock software:

Using time clocks helps make the work environment impartial

Employees are generally interested to know if they are being treated the same way as their counterparts. Time tracking software ensures transparency and the concept of the employer being unfair goes out of the window.

It gives employees a sense of confidence that everyone is treated the same way since there is no human intervention. This also makes companies resistant to any possible lawsuits based on unfair compensation or favoritism.

Time clocks can help cut down expenses and save time

This kind of tool helps cut down the time spent on calculating expenses and employee hours. Instead of relying on a spreadsheet and a calculator to compute the total hours and payment, employers can use time clocks to eliminate the errors that come with manual data entry and calculations. This ensures the staff members are not underpaid or overpaid for the work they've done.

Increases employee accountability

Time clock systems eliminate the possibility of employees checking in when they aren't present in the workplace and the dreaded problem of buddy punching. Time clock software generally comes with GPS tracking to ensure employees are clocking in from the right place. This means no more clocking in for staff when on the way to work.

More importantly, administrators no longer have to constantly follow up with employees to get their timesheets. Since employees know their working hours are constantly monitored, it can help encourage punctuality and motivate the employees to come in on time.

This also works in favor of the employees, as they do not have to manually keep track of the duration of their work day. Since everything is automated, it makes lives easier for everyone involved.

Helps stay on top of any possible attendance issues

Stay in the know about the attendance patterns of your workforce. Repeatedly coming in late, and systematically planning absences (being consistently sick on all Fridays or Mondays, for instance) can easily be viewed and monitored with a time clock software.

Absenteeism is a bigger problem than we think. To put things into perspective, unscheduled absenteeism costs close to $3,600 per hourly employee per year and $2,650 per salaried employee per year. There is a loss of productivity when the employees come back to the office because of the added time they take to get back to their highest productivity levels. When members of the workforce are frequently absent from work, the other employees can start to feel resentment, since they are often expected to fill in the missed shifts.

Helps set targets and expectations backed by data

Understanding and analyzing the trends from time clock data can help businesses set targets for their employees. For instance, if employees in your organization are complaining about burnout due to work, taking a closer look at the time clock data can give more insights. If employees are not taking sufficient breaks, it will make sense to establish a new rule for taking breaks so that they are not overworked. Analyzing the timesheet data can give insights into the processes that need to be improved to enhance productivity.

Ways to implement time clock software

Change can often be the most difficult thing to bring about in a workplace. With many of the businesses used to the traditional methods of tracking time, it can be challenging to try and implement a time-tracking app. Here are some quick tips that you can keep in mind as a business owner if you are looking to switch to an efficient employee time-tracking method:

Pick the right software

This is perhaps the most important step of them all. Each business has its own set of unique needs. It is important to exercise due diligence before picking software to invest in. Check if the application ticks all the boxes your business is looking for. Some of the basic features companies generally look for are the ability to track time in a format understandable by payroll software, geo-fencing, and reporting capabilities. Ensure that you pick software like Zoho Shifts, which is packed with these features and much more to cater to the needs of different types of businesses.

Help employees understand the necessity of such software

When companies are implementing a change as big as setting up new time clock software, it is necessary to help the employees understand the need for this change. Explain to them how it will improve the accuracy of their paychecks, and how it will reduce the amount of work they have to do every day to keep track of time.

Prioritize employee training

One of the better ways to incorporate time-tracking software quickly is by setting up employee training programs. Give employees the time to get used to the product and guide them initially. Keep reviewing how the employees are using the product and organize follow-up training sessions if necessary.

Ensure employees feel heard

Address the concerns that employees may have when it comes to this change. It is natural for employees to have questions about what to and what not to keep track of when it comes to time tracking. Questions like "Should I clock out when I take a coffee break?", "When I have a quick personal conversation, should I monitor it?", or "How can I quantify the time I spend helping other colleagues?" are natural questions that may pop up for employees. Make sure all these questions are addressed and answered. Employers can also send out feedback forms a few weeks after implementing the time clock software and address any possible concerns.

Conclusion

Time clocks offer numerous benefits. Improved time management, better employee accountability, and effective compliance with the FLSA labor laws can help businesses save time and money. Implementing an employee time clock in the workplace has now become a necessity. It gives employees all the tools they need to make more informed decisions that can benefit the business.

With plenty of solutions available on the market for your time clock needs, it is important to do the necessary research and find the one that best suits your needs. Zoho Shifts is a great option for the unique needs of any type of business. Investing in a time clock solution can create an efficient workplace and greatly benefit your business in the long run.