In both the best and worst of economic times, worker productivity is a major management goal. Making sure that employees efficiently carry out their tasks is critical to the success of both government and business enterprises. First, of course, the workers have to show up.
“Buddy punching” — the practice of having one worker punch the time card of an absent colleague — is still troublesome. In addition, manual time and attendance record-keeping often leads to costly errors in payroll accounting, such as applying false overtime credit.
Automated time and attendance (T&A) programs can significantly reduce the costs associated with conventional personnel and payroll records management. Such systems can be employed defensively to curb cheating and correct errors. However, time and attendance software programs can also be used proactively to deploy personnel resources more efficiently.
A Low-Risk IT Investment
“Using T&A technology helps enterprises more efficiently manage what is probably the largest moving part of the business, and that is the payroll — especially for hourly workers,” Rebecca Wettemann, vice president for research at Nucleus Research, told CRM Buyer.
Payroll error caused employers to overpay their workforce by an average of 1.2 percent, reported participants in a recent Nucleus Research study. On average, employers experienced a 0.72 percent “payroll inflation rate,” stemming from overstated worker hours.
Investments in workforce management programs, especially those dealing with the basics of time and attendance, are among the most attractive to implement in terms of efficiency and return on investment. Paybacks can occur in less than a year, according to Nucleus Research.
A major Florida school system reduced the payroll costs of 5,000 substitute teachers by 4 percent using a time and attendance program, for example, while an East Coast shipyard cut its payroll inflation rate by 90 percent after implementing a tracking system.
Software Promises More Savings
Improvements in the accuracy of time and attendance programs will soon make the technology even more attractive to use, according to Wettemann. For instance, biometric tools will become increasingly useful.
“We are moving from the paper punch card, to using an electronic swipe card like a credit card, to biometric employee identity programs,” she said. “The fingerprint technology was a start, but now there is the capability for hand geometry identity that will impact the buddy punch phenomenon.”
Another benefit is worker safety.
“One significant development is managing fatigue in the workplace to reduce risk,” said Kevin Choski, president of Workforce Software.
“There are a number of industries with high-risk roles — such as airline pilots, truck drivers, and train or fleet operators — that are tightening the rules surrounding how many hours the employee can work and how many break hours the employee must have between shifts,” Choski told CRM Buyer.
“Some of these rules will be highly complex, like nuclear power plant regulations, and these organizations will likely turn to workforce management technology to manage and enforce these regulations, and to maintain an audit trail of activity,” he said.
The changing character of the labor market presents another opportunity for T&A programs.
“Typically, the ‘contingent workforce’ of temps and contractors are rarely tracked in a human resources system and are not accounted for in budgets and not documented through a time and attendance system,” said Nov Omana, chief executive officer of Collective HR Solutions and board member of the International Association for Human Resources Information Management.
They are rarely measured for deliverables in a performance management system, so to increase the true understanding of the people ‘doing the work,’ I feel you need to account for these resources,” he told CRM Buyer.
“The future workforce will contain more contingent workers, such as retirees moving to contract positions. There will be layoffs forcing the use of more contractors, and more people will be seeking mobility and diversity in their job,” Omana predicted.
In addition to labor market changes and personnel deployment applications, Workforce Software’s Choski sees another important IT development coming from proposed legislation. The Employee Free Choice Act, now pending in the U.S. Congress, could trigger increased use of workforce programs, including time and attendance applications.
“There is a high probability of this act passing soon, and it will change operating environments with the increase of union representation that will result in more complex workforce policies and rules for employers,” said Choski. “More employers will turn to workforce management technology to support this legislation.”
Vendors Provide Levels of Use
Time and attendance software can generate a wealth of data about hours worked, employee output and performance, and personnel costs that can be analyzed by managers.
“We have the ability now to be more analytic, to use the information to improve employee scheduling, and even to generate models for forecasting and predicting how human resources can be deployed,” noted Nucleus Research’s Wettemann.
Time and attendance software is only one component of the entire human capital management IT market, which includes a broad array of workplace management applications. However, with a worldwide HCM program market approaching US$6 billion, according to a recent Gartner report, there appears to be robust potential for the T&A software submarket.
The vendor community for is broadly based.
“There are at a minimum three tiers of providers,” said Workforce Software’s Choski.
Entry-level providers offer baseline time-and-attendance calculations for regular and overtime payroll purposes. These out-of-the-box vendors provide cost-effective products with minimal options and support. Some entries at this level, said Choski, include TimeClockPlus, TimeForce and Attendance on Demand.
Next are vendors that serve the enterprise market for customers with complex requirements including compliance applications and advanced human resource strategies. Choski counts his firm among these vendors, along with Oracle and SAP.
With employers increasingly concerned about better personnel management — from tracking missing workers to improved scheduling — the time for time and attendance programs has come.