Tracking employee attendance is important for more than just payroll. With the proper time and attendance equipment, business owners can acquire valuable insight about employee trends and company health.
Warren Steinberg, senior human resources consultant for Sikich, said that due to the number of laws and regulations, most employers should be tracking attendance for compliance reasons.
"There are also many systems that offer reporting to help companies cut costs as an added benefit," Steinberg told Business.com.
How is employee time and attendance equipment valuable to your business?
Time and attendance systems serve a number of purposes. First and foremost, they track the amount of time employees are working each day. In addition, time and attendance solutions accurately obtain important payroll information and ensure employees are accountable for their work. They can also reduce time fraud, increase security, maintain transparency and minimize administrative work.
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Josh Mazza, product manager at Paychex, said the data collected by these systems is extremely valuable to business leaders because, among other things, it allows them to measure employee engagement and separate high and low performers.
"Employee attendance provides business owners and HR leaders with valuable insight that measures the overall 'health' of the organization," Mazza said. "Comparing actual hours worked to scheduled hours allows an employer to view data that impacts the business, such as the number of absences, tardiness, and sick days taken in the last week, month or year."
Understanding the many use cases for employee attendance tracking solutions is essential before you dive into what equipment and features you will need for your business.
Employee time and attendance equipment features
There is a wide variety of valuable time and attendance system features that can benefit your business. Here are some of the top features to look for when considering what you will need.
The most basic use of a time and attendance system is the ability to track employee time. There are various timeclock options that can integrate with attendance systems, such as RFID card readers, PIN entry, IVR (interactive voice responses), mobile and online applications, and biometric clocks (fingerprint scanners and facial or iris recognition).
These systems can automatically merge your data into a payroll service, such as Paychex or Gusto. The automatic transfer of data reduces the possibility of human error.
Scheduling and attendance tracking
Another important feature is the option for scheduling and attendance tracking. This allows you to use one fully integrated platform to create employee schedules, record requests, manage sick days and paid time off (PTO), and track vacation days.
Labor distribution and job costing
Many time and attendance systems allow you to view how much time employees spend on specific projects or jobs, or at certain locations. This feature is primarily used to estimate the cost and labor for future projects. It can also provide insight as to your most productive workers and employees who might need a little more guidance.
This feature provides employees the opportunity to clock in and out remotely. If employees are working offsite, they can still accurately record their hours in real time. This is primarily used in accordance with online and mobile device applications, since they afford the most flexibility.
A time and attendance system feature that employers might overlook is the option for employee self-service. This is extremely helpful to employees, as it enables them to control time-tracking tasks. Employees can manage their scheduling, review their hours worked and track their PTO accruals.
Geolocation and geofencing
Geolocation capabilities give employers an accurate way to track employees, as it shows the location of the employee's mobile device. Geofencing is a bit more advanced, as it enables the use of GPS or RFID technology to trigger an alert when a mobile device enters or leaves the location of the virtual work boundary. This automates the process and gives employers peace of mind, knowing when their employees are onsite or offsite.
Necessary equipment based on company size
For many businesses, it is not necessary or realistic to buy a time and attendance system with every feature available. The size of your company plays a part in the type of time and attendance software you will need.
Small businesses usually have simple timekeeping needs. Although some small businesses require additional equipment features, they primarily need a time and attendance system that will keep accurate attendance records and ensure legal compliance.
"[Small companies] have less employees than a larger organization and, therefore, have less of a need to implement a solution with capabilities to support multiple locations, different employee types and layers of management," said Mazza. "Smaller companies typically need a solution that is not disruptive and extremely simple for someone to record their worked hours."
Large enterprises require many additional features to meet a variety of business needs. Tasks such as timeclocking, payroll and scheduling are too time-consuming for large companies to track manually. For extremely large organizations, PTO, sick days and job costing would be difficult to accurately track by hand.
"Larger companies require more complex system functionality to automate manual processes and security elements to ensure their employees are accurately reporting their time worked," said Mazza. "The solution must balance meeting these needs while still being easy for employees to use."
Necessary equipment based on industry
Another important factor in your attendance tracking needs is your industry. For example, the type of time collection method you use will depend on whether the employees in your industry are onsite or remote. Here are some common industries and their basic attendance-tracking equipment needs.
In-office (e.g., finance, banking, marketing, management)
In-office employees are able to use a web browser or a stationary timeclock, such as an RFID badge or PIN code. IVR and biometric clocks can be useful when higher security is necessary, like in the finance or government industries. Features like payroll integration, scheduling and attendance tracking are necessary.
Retail and hospitality
In these industries, onsite timeclocks are most desirable. Security levels are not as crucial here, so employers can opt for lower-level security options such as RFID badges or PIN numbers. Since hours are less consistent than in other industries, scheduling and time-off features are very important. Mazza said these industries need more in-depth scheduling tools to reference historical data, allowing them to budget workers and build schedules based on how busy they were in prior years.
In the manufacturing industry, biometric timeclocks are most reliable and minimize buddy-punching. Since employees in these industries typically report to the same location every day, a mounted timeclock or tablet kiosk is a viable option. Employee self-service and integrated payroll are useful, since payment may vary by job output.
A mobile clock option is necessary for employees in the construction industry, since work sites often change. Employees also need an added scheduling feature to allow them to see which work sites they must report to and what tasks are required at each site. Mazza said geofencing and geolocation capabilities are useful because they provide employers with the insight and peace of mind that their employees are working where they should be each day.
Trucking employees require the flexibility of a mobile timeclock option. Since the industry consists of primarily remote workers, an employee self-service feature is essential for drivers to track their own routes, schedules and hours on the road. Features such as remote clocking and payroll integration enable trucking professionals to accurately report and receive payment for miles driven, gas, and tolls.
Tracking employee attendance has many benefits, and the necessary equipment depends on each business's needs.
"It really depends on the industry, the size of an organization, the employees and the benefits the employer is looking to get out of the system," said Steinberg. "There is no one-size-fits-all system."
Keep this in mind, making sure to analyze your individual business structure before purchasing time and attendance software.