The ROI of using time & attendance software

Tools and technology to track time & attendance have been around for a long time. From the invention of the time clock in the late 1800s to today’s mobile-friendly apps, there has always been a need to accurately record the time & attendance of workers.  

With ever-increasing labour costs and the rise of the digital workplace, it’s never been more important to have software that helps employers keep track of who’s doing what, and when.  

However, just like any investment, it’s important to be able to demonstrate the return on investment (ROI) of time & attendance software before taking the plunge. 

This blog will look at the benefits of using time & attendance software to help you decide if it’s worth the investment for your business. Bottom line: Yes, time & attendance software can produce a good ROI. Let’s explore some of the reasons why. 

Why time & attendance software is needed 

Like most aspects of workforce management, the manual methods used in the past no longer cut it in today’s digital world. Indeed, the mechanical time clocks used to stamp day and time information on a paper card seem like a throw-back to a very distant bygone era. Even having employees manually write their clock-in and clock-out times on paper seems antiquated. 

These traditional methods produce (or produced) several challenges, including: 

1. Inflation of work hours 
   This is when an employee lies – or makes an honest mistake – about their start and/or end times, which then gives the appearance of working a longer shift than they actually did. A variation on this is pre-populating start and end times, including lunch breaks, in advance for the week.​ Similarly, ‘rounding-up’ work hours to the closest quarter hour or half hour is another way to inflate work hours. So, if an employee finishes their shift at 4.53pm they will round it up to 5pm. It may not seem like much, but with a large workforce, it can add up. 

2. Break times and work avoidance 
   This occurs when employees take overly long break times, or unauthorised breaks entirely. This can be especially prevalent in geographically dispersed work locations or when employees are constantly on the move, away from supervision. Work avoidance is harder to track without almost constant supervision but involves carrying out personal activities on the job such as scrolling social media feeds, talking on the phone, checking personal emails, etc. 

3. Buddy punching 
   This occurs when one employee ‘punches in’ – or clocks on – for another employee to cover for their absence or lateness. This not only costs the business money in terms of lost productivity, but it can also build resentment if it’s witnessed by other workers and management is unaware of what’s going on. Employees may start to feel resentment that people are being paid despite not showing up on time or not working at all. 

4. Fraudulent data entry 
   Timesheets or timesheet systems may have glitches that require the need for data to be re-entered. When these glitches occur, it’s easy for an employee to lie about their hours. And if this is done in a manual system, using physical timesheets, this may not be intentional: as timesheet details are copied across or replicated, there’s a heightened chance of human error, resulting in inaccurate numbers. 

5. Timesheet interpretation errors 
   When it comes to managers approving handwritten timesheets, it’s easy to mistake a ‘5’ for a ‘6’ or a ‘8’ for a ‘3’. That can have major repercussions for pay accuracy. This is magnified if large volumes of timesheets need to be approved. Digital timekeeping methods are far more accurate, reducing the risk of mistakes on the part of managers, and also reducing time theft or timesheet fraud. 

Benefits of using time & attendance software 

Let’s delve a little deeper into some of the benefits that time & attendance software can provide. 

Improved accuracy in tracking employee hours and attendance 

Executives will always be interested in ways to optimise their organisation’s use of human resources. A foundational step is being able to accurately track employee hours and attendance. This leads to a better understanding of workforce management metrics such as absenteeism, tardiness, overtime, and more.  

For example, if instances of ‘no-shows’ are occurring more frequently in one area of the business, what is the root cause? Is it a management issue (e.g. their span of control is too broad to be able to keep tabs on everyone)? Are there deeper reasons for people not showing up for work (e.g. are rosters not being distributed early enough)?  

All these elements impact workforce planning: how many employees will be required to work certain shifts? Staying within a set labour budget depends on having the right data to hand – and that all starts with being able to accurately track hours and attendance. 

Streamlined payroll processes leading to cost savings 

A best-in-one human capital management (HCM) suite like Humanforce enables HR to link multiple systems together and thus streamline processes from timesheet to payroll. With disparate systems, this is easier said than done, as moving data from one system to another increases the risk of data duplication and errors.  

Having one integrated system that links roster creation (via awards and compliance interpretation engines), to time & attendance inputs from employees, through to manager timesheet approvals, and onto payroll, will result in more accurate payments to employees, better compliance, and costs savings for employers.    

Enhanced compliance with labour laws and regulations 

Certain industries have mandated staffing requirements. For example, in Australia, aged care employers have mandated care minutes to adhere to, and childcare & early learning employers have educator to child ratios. If shifts are under-staffed due to poor rostering or unplanned absenteeism, compliance breaches can occur. 

It’s also important to remember that modern awards and employment agreements have rules not just about pay rates and penalty rates (overtime, etc.), but also on the number of hours worked, the days and dates worked, the time of day that work is undertaken, the number of hours since an employee’s last shift, and more. Mandated break times may also need to be considered when rostering and tracking time & attendance.     

A HCM suite like Humanforce, which combines workforce management solutions (e.g. rostering & scheduling, time & attendance, leave management) with our awards & compliance engine and payroll, has inbuilt alerts and reminders. If rosters are not compliant, managers will be alerted to what the problem is before the roster is published. Likewise, if there are no-shows, the manager will be alerted – enabling them to source a replacement staff member quickly. 

Insights into workforce trends and productivity 

Are your employees showing up on time, working their scheduled hours, and taking their allocated leave entitlements? Time & attendance software can produce reports to track all those datapoints, and so much more. Reports can show: 

• Where overtime is occurring (by department, job role and location) 

• Absenteeism – planned or unplanned 

• Tardiness 

• Break allocations – ensuring that appropriate rest breaks are being taken 

• Leave entitlements 

• Who’s working, where and when – this can offer insights about the fairness and equity of shift allocations, whether the hours being worked are enough to cover demand, etc. 

This data can also be used to monitor job costing and produce more efficient work schedules, ensuring that the company gets the most out of its workforce. 

Time & attendance software can offer businesses more clarity regarding the value of their employees. This is done through time & attendance job costing, which tracks how much each employee costs the company based on their hours worked. This information can be valuable when evaluating employees, as it can help to identify areas where you can save on costs. 

ROI of using time & attendance software 

When it comes to automated time & attendance solutions, ROI is achieved through reduced labour costs and more efficient use of human resources. 

ROI for technology is typically calculated using this equation: [(Financial gain - Investment cost)/Investment Cost] x 100. It measures the efficiency of an investment and helps determine if it's worth pursuing. 

The ‘expected gains’ could mean calculating net profit over a set period of time, which might include hard dollar amounts coming from increased productivity and various other financial metrics.  

For example, you might want to consider the financial savings made from: 

• Fewer payroll errors 

• Less overtime 

• Less administration time for managers (who need to approve timesheets) and payroll officers (who need to ensure pay calculations match hours worked, and that all award/employment agreement entitlements are being met) 

• Fewer instances of timesheet fraud. HRD cited research from tech comparison website Software Advice that found 43% of hourly employees have exaggerated the hours they worked in a week. A different study by Nucleus Research found that 74% of employers experience payroll losses due to buddy punching. These losses average 2.2% of gross payroll. In a typical workplace scenario, the numbers tell the story. Say, for example, a retail employee logs an average of 10 extra minutes per day because they clock on late. With 5 employees, that’s 50 minutes per shift. If you’re paying $30 per hour, that’s 216 hours a year lost, or a total of $6,480 in wages. With multiple shifts per day, or more workers, that number rises accordingly.    

Total costs need to consider all financial outlays involved in setting up the new software – everything from licensing fees to implementation costs and training expenses. You will get a ratio that you can use to compare different investments.  

Risks of not implementing time & attendance software 

Here's what you're risking when you don't automate employee time-tracking: 

• Time theft:  As outlined earlier, when time & attendance is tracked manually, it's easy for employees to change their hours. This can lead to significant losses for your business and decreased morale among honest employees. 

• Compliance breeches: Staying compliant with labour laws and ensuring people are paid correctly for the hours worked is essential for any business. However, manually tracking time & attendance makes it difficult to maintain accurate records. This can lead to costly fines and penalties if the government audits you, and can result in under- or over-paying staff. 

• Poor data quality: Manual tracking methods are often inaccurate, leading to poor decision-making based on bad data. Time & attendance software, on the other hand, uses sensors and other technologies to collect accurate data that can be used to improve your business operations. 

• Productivity loss: Manually tracking employee time & attendance eats into time to do other, more productive tasks. Automating this process frees up time for managers and employees, which can be better spent on tasks that add value to your business. 

• Missed opportunities: When you don't have accurate data on employee time and attendance, you miss out on opportunities to improve worker productivity and optimise your operations. Time & attendance software provides actionable insights that can help you make data-driven decisions to improve your business. 

Trends in time & attendance software 

Driven by the rise in cloud computing and mobile-friendly technology, and more recently, biometric authentication and geo-location tracking, today’s rostering & scheduling software is designed to provide accurate, compliant and user-friendly tracking.  

Many of these innovations – such as biometric authentication – are driven by AI and machine learning. Just as critically, AI is providing real-time updates on attendance status, alerting managers if employees are late or fail to show up at all, enabling them to fill vacancies quickly. 

Here are 5 trends to keep an eye on: 

1. Mobile clocking and timesheets: Mobile clocking tools and timesheets, available in time & attendance apps like Humanforce’s Work App, are a convenient and efficient way to track employee time & attendance, and it makes the process much easier for employees too. These apps allow employees to log their hours, request time off, and view their schedules (including start/end times) and payslips directly from their mobile devices. Managers can also approve timesheets in bulk with ease, saving time, hassle and avoiding pay run delays. 

2. Biometric authentication (finger vein scanning, facial recognition): Whether a business is using on-site kiosks or a mobile app to automate time & attendance processes, today it’s all about secure and (mostly) contact-less time-tracking. Employees can simply scan their faces or fingers to clock in and out, eliminating the need for physical badges or keypads. This technology, like that offered by Humanforce, enhances accuracy and prevents buddy punching.  

3. Geo-location clocking: In countless businesses, it’s important for people to be clocking on and off from specific locations. Humanforce’s  Mobile Work App enables geo-fenced clocking. Ideal for employees working in geographically dispersed locations such as sports stadiums or conference centres, this tech allows geo-fencing zones to be defined by job role, department or specific event, so that employees can clock on and off from different zones. 

4. QR clocking: Clocking in and out of shifts needs to be fast and intuitive – especially in busy, high-volume environments. QR codes are not new, but they have only recently started being used for clocking in and out of shifts via mobile apps. It’s another way of limiting timesheet fraud and ‘buddy punching’, as unique QR codes are assigned to authorised employees and are refreshed every 3 seconds. For more on preventing time theft and Humanforce’s Advanced QR Clocking feature, read our blog. 

5. Integrated reporting: HR is increasingly becoming a data-driven function, but to use data effectively, the right reporting tools are required. An integrated HCM suite like Humanforce and its Workforce Analytics solution enables a comparison of roster and timesheet cost against forecast costs and actual revenue figures for things like events. Out-of-the-box and bespoke reports can also be created to track specific business needs.  

Future outlook 

Time & attendance data is already playing a key role in workforce optimisation. This will continue to evolve. For example, workforce analytics tools powered by AI will be used to define and track relevant KPIs, such as employee productivity, attendance, overtime costs, and absenteeism rates. Performance-based reward & recognition will flow off the back of those insights.  

Advanced analytics tools will leverage historical time & attendance data to generate accurate forecasts and predictive models. These tools will help leaders anticipate staffing needs, identify potential problems, and keep labour costs in check. 

Now and into the future, the short-term and long-term benefits of automating time & attendance speak for themselves. It’s also possible that such technology will give your business a competitive advantage as HR continues its drive towards data-driven decision-making.  

About Humanforce 

Humanforce is the best-in-one platform for frontline and flexible workforces, offering a truly employee centred, intelligent and compliant human capital management (HCM) suite – without compromise. Founded in 2002, Humanforce has a 2300+ customer base and over half a million users worldwide. Today, we have offices across Australia, New Zealand, and the UK. 

Our vision is to make work easier and life better by focusing on the needs and fulfilment of frontline workers, and the efficiency and optimisation of businesses. 

Contact us today to learn more about how Humanforce can automate and simplify all aspects of people management in your organisation.