The 5 best ways to track employee hours for HR purposes

JetPay Communications

March 21, 2019

It’s essential to the success of every business to track employee hours. Human resources management is critically important for three interrelated reasons.

First, businesses need a clear understanding of their time and labor costs for budgeting purposes. Moreover, employee tracking allows organizations to price their services effectively by providing information regarding how much time and money it takes to complete a project. Lastly, time tracking allows employers to chart the performance of individual workers.

To that end, here are five ways organizations can improve their employee time tracking and improve human resources workflow.

Embrace Employee Time Clock Software

Although time tracking software has become prevalent, some organizations still use employee timesheets or email to manage labor hours. Despite the perceived simplicity and affordability of older methods of employee time tracking, the benefits of employee time clock software make upgrading a no-brainer.

Firstly, software can greatly reduce employee self-reporting errors. The unfortunate reality is that workers have a tendency to underreport the amount of time they spend working on a project. It’s incredibly common for employees to unintentionally exclude time spent on tasks such as client emails or phone calls.

In fact, the Harvard Business Review reported that employee timesheet errors affect 40 percent of U.S. businesses. Though it might not seem like a big deal on its own, that unaccounted-for time costs organizations an average of $50,000 per employee per year.

In addition to optimizing company profits, employee time clock software can also be a huge boon to human resources departments. No longer needing to compile labor hours from various employee timesheets and then having to import that data into a payroll system will save countless hours.

Utilize Physical Time Clocks

Physical time clocks track employee hours by recording when employees clock in and clock out. In the past, this methodology involved using paper punch hole cards to track employee hours. Today, physical time clocks utilize everything from magnetic stripe cards to RFID tags to PIN pads.

Physical time clocks can be very helpful when it comes to improving your budget. By knowing exactly how many hours your workforce spent on a given project, you can create accurate billing statements for clients and better estimate the costs associated with similar projects in the future.

Time clock data can provide key insights into how long it takes individual workers to complete their assigned tasks.This data can be very helpful to understanding which employees are excelling and which might need HR counseling.

Although physical time clocks can be a powerful time tracking tool, they are vulnerable to certain kinds of payroll fraud. For example, “buddy punching” occurs when one employee clocks in for an absent friend. The American Payroll Association found that buddy punching affects 75 percent of American businesses.

Similarly, physical time clock systems are also vulnerable to “ghost employees.” This type of payroll fraud involves fraudsters within the organization creating fictitious employee profiles to collect multiple paychecks. However, there are digital solutions that can address payroll fraud.

Consider the Viability of Biometric Scanners

Like physical time clocks, biometric scanners also automatically log and compile employee hours. However, instead of PIN entries or card swipes, they require workers to submit to a fingerprint, iris, palm vein or facial recognition scan to clock in. Depending on the provider, biometric scans can be taken via standalone terminal or software application.

Because fingerprint and vein scans are extremely hard to fake, they can be highly effective at eliminating buddy punching and ghost employees.

As such, employers who utilize this method of time tracking can be assured that their payroll costs reflect actual labor hours. And because of that accuracy, biometric scanners can provide organizations with vital insights into individual employee performance.

Despite the benefits they offer, biometric scanners are still an emerging technology. Consequently, their startup and maintenance costs may be too expensive for some companies. Moreover, biometric onboarding can be a challenge for organizations that employ a lot of remote workers.

Transition to a Cloud-Based Solution

While upgrading to desktop-based labor tracking software is good, transitioning to a cloud-based solution is even better.

The best thing about cloud-based software is that it provides companies with remarkable resiliency. In the event of a natural disaster or data breach, cloud-based data can be preserved and accessed from remote locations. Another advantage of cloud-based solutions is that they allow employees to clock in, clock out and put in a request to use accrued paid time off via desktop or mobile application.

As such, cloud-based solutions also give HR the ability to quickly fix punch errors, approve requests and import data to payroll with remarkable speed.

Invest In Fully Integrated Time Tracking Software

The best way to track employee hours and help HR is to invest in a fully integrated time tracking software, such as JetPay’s Workforce Today. A cloud-based time and labor management solution, the software is designed to increase productivity and business performance. Primarily, it does this by fully integrating employee labor hours and payroll, so no HR time has to be wasted on manual data entry.

Moreover, Workforce Today allows HR reps to manage time-off balances from the same dashboard, so approving PTO requests is easy and fast. The software also allows users to build schedules and automatically compares them to actual attendance, so employee mistakes can be caught and resolved efficiently.

JetPay’s time tracking software also provides robust insights into employee performance. Workforce Today generates regular time and labor and attendance reports so organizations will know when they need to shift resources to hit project benchmarks.

The system also creates automatic alerts for things like schedule changes, tardiness, unapproved overtime and other disparities between hours scheduled and hours worked. The software also features intelligent systems that detect patterns suggestive of buddy punching and other types of payroll theft.

As such, the time savings, insights and fraud prevention provided by Workforce Today can have a truly game-changing effect on an organization’s overall efficiency and profitability.

If you need help streamlining your organization’s payroll process, contact us today.

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