August 28, 2020 | Time and Attendance | Posted by Ascentis Thought Leadership
Time & Attendance ROI
Workforce costs are the single biggest expense facing most organizations, and also one of the trickier areas to parse when it comes to return on investment. With so many workforces including a mix of full-time and part-time employees, contractors, and freelancers, calculating the productivity and costs associated with employee time tracking becomes a complicated and time-consuming process.
That uncertainty gives some companies pause about investing in new workforce management solutions. There are a number of variables and intangibles in play, and demonstrating the return on investment associated with automating your time and attendance system can be a challenge. That’s why we’ve come up with some concrete illustrations to demonstrate the potential ROI of a time and attendance solution. Read through to learn more about time and attendance automation, or use the links below to navigate throughout the post.
- Automated time and attendance system
- Benefits of automated time and attendance systems
- Risks of not automating
- How to calculate ROI
- Time and attendance management software
- The bottom line
Automated time and attendance systemBack in the day, time and attendance were handled manually with timesheets and punchcards. When an employee arrived on the job, they would either use a machine to manually punch in with a punchcard, or simply write down what time they started work on a timesheet. When work was over, that punchcard or timesheet is marked again. While this got the job done in terms of tracking hours and paying employees, there are several problems with manual time and attendance.
One of the most significant problems with manual time and attendance is that it’s not always accurate. When compared to time and attendance automation, there are a lot of mistakes that can happen with manual timekeeping. It could be that an employee looked at a clock that was slow when writing their times down, or perhaps they intentionally wrote down the wrong time when clocking in to get more hours. Mistakes like this can cost your company money when you have to overpay employees, plus it can lead to non-compliance if you’re not tracking time effectively.
Automated time and attendance tracking is the future when it comes to time and attendance because it eliminates most of the possibility for human errors. With an automated system, you don’t have to worry about employees using an inaccurate clock or keeping track of a timesheet. Employees’ hours are tracked automatically through a software system, which means results are accurate no matter what.
Automated time and attendance hardware can also reduce the risk of fraudulent practices when it comes to time and attendance. Practices such as buddy punching and time theft can cost your company a lot of money over time, but these practices simply aren’t possible with automated time tracking tools. When employees have a computer system keeping an eye on how much they’re working, they’re much more likely to be honest with their hours.
Time and attendance ROI depends on how accurate your time and attendance system is, which is why these automated systems were created. With automated time and attendance systems, employees have the ability to clock in and clock out on any device, such as a smartphone, tablet, laptop, or computer. While this setup can be expensive, it’s worth the upfront investment when you consider the long-term savings.
Benefits of automated time and attendance systemsThanks to modern tools like automated time and attendance systems, running a successful business has never been easier. Here are some of the biggest benefits of switching to an automated time and attendance system when it comes to time and attendance ROI.
- Increased productivity: Reducing the time spent on routine activities like clocking in and out, adjusting schedules, and submitting PTO requests has a significant impact on overall productivity. Self-service options make workers feel more empowered and improve employee morale, which in turn increases productivity.
- Improved data accuracy: Upgrading from outdated recordkeeping techniques like manual data entry and paper timesheets reduces errors and provides accurate data that eliminates the time and expense of making corrections.
- Compliance: Non-compliance with the many federal, state and local laws governing workforce management can do financial damage via fines, probation, and loss of reputation, and also open a business up to costly lawsuits. Automation eliminates potentially expensive errors and makes sure your internal processes are up to date with the latest compliance standards.
- Enhanced reporting: Updating reporting functions make schedules more visible and predictable, reducing unnecessary overtime expenditures and ensuring the right workers are scheduled for each shift and task.
- Standardized platforms: Using a common dashboard for all time and attendance functions decreases the risk of costly miscommunications, helps standardize and simplify time-tracking processes, and creates a more manageable structure for your IT team.
Risks of not automatingAs we now know, there are several benefits of automated time and attendance systems that can help grow your business, keep you in compliance, and improve employee satisfaction. If you’re still debating whether a time and attendance system is right for you, consider these risks of not automating:
- Low productivity: Without an automated time and attendance solution, employees will lose productivity by spending more time performing manual tasks like tracking hours rather than focusing on tasks related to growing the business.
- Compliance risks: If you’re tracking time and attendance manually, there’s always a chance that you’re going to make an error. With automated tracking, you don’t have to worry about non-compliance and the penalties that come with it.
- Costly errors: Incorrectly tracking employee hours can lead to huge losses, so the accuracy that an automated time and attendance tracking system provides is a great way to save your company money.
- Time theft and buddy punching: Buddy punching and time theft can cost your business a lot of money, but these practices aren’t possible when you’re using an automated time and attendance system.
- Potential for class action lawsuits: Inaccurate time and attendance could lead to a class action lawsuit, so save your company time and money by avoiding legal issues altogether.
- Decreased employee morale: Employees want to feel valued and want to be compensated fairly for every minute they work, so make sure you’re keeping employee morale high by automating time and attendance.
How to calculate ROIInvesting money in time and attendance may not seem like a good way to grow your business and save money, but it’s all about the time and attendance ROI. In addition to this ROI, you also have to consider the fact that automation helps you avoid having to rely on Department of Labor compliance assistance. To calculate ROI, you can use a simple ROI formula to calculate your time and attendance ROI:
ROI = ([Final Value of Investment - Initial Value of Investment] / Cost of Investment) x 100
Calculating ROI using the above formula is fairly simple. You start by looking at the final value of an investment versus the initial value of that investment. Let’s say you invest $100 in stocks, but those stocks end up being worth $200 when it’s time to sell them. Using this formula, you’ll find that you had a 100% ROI (or a 100% increase on your $100 investment).
Of course, it’s important to consider other factors that may be at play when it comes to ROI. For example, trading fees may take away from the profit you made from trading stocks. While ROI isn’t always 100% accurate unless you’re taking all these numbers into account, it’s still a great way to determine if an investment is worth it.
At Ascentis, you can use our free human resources ROI calculator that allows you to estimate your potential annual cost savings when automating your HR. We even have a similar PEO cost calculator that allows you to calculate your costs when using a professional employer organization.
Time and attendance management softwareAccurate and easy-to-use time and attendance management software is key to succeeding in the modern business world. At Ascentis, we offer tools such as our automated Time and Attendance software that make it easy for you to run a better business.
With our Time and Attendance software, you can save yourself time while making sure you’re compliant with FLSA, FMLA, state and local laws. You can create and modify employee schedules within the software, plus time tracking is automated, so you don’t have to keep track of employee hours. With cloud-based technology, you can access schedules, employee hours and make updates no matter where you’re located.
Our Time and Attendance software even offers flexible time tracking for remote, hourly, and salary employees. You can conduct complex calculations to determine how many hours your employees are working and how much you owe them, whether they’re independent contractors, remote workers, or in-house employees.
In addition to tracking hours and making sure you’re staying compliant, our Time and Attendance software can also help you keep track of employee leave. Make sure employees can easily submit requests for time off and easily keep track of their PTO without having to do it manually.
The bottom lineThere is simply too much money involved in your time and attendance operation to not take advantage of these opportunities to improve efficiency. Automating your timekeeping functions is a proven, effective way to boost your profitability while also streamlining your day-to-day operations. Learn more about the reasons Ascentis time and attendance software and hardware solutions are some of the soundest investments your organization can make.
With more than 35 years of experience in providing Software as a Service (SaaS) solutions, Ascentis thought leaders have become a respected source for insights, tips, and innovations in the Human Capital Management (HCM) space.