Time and attendance software still an organizational staple

While trendier HR software grabs headlines, time and attendance systems remain a crucial tool for optimizing how organizations track and pay hourly employees.

While the buzz over human resources software may be all about analyzing workforce trends and cultivating talent, time and attendance software remains a staple for companies, which are still struggling with how to optimize systems and business processes to track and manage how they pay hourly employees.

Time and attendance software, which has been around for years, replaces manual processes for logging employee time, performing basic scheduling tasks and tracking things like overtime and vacation. Without time and attendance systems in place, companies risk overpaying employees and losing productivity. They can also get sidetracked by the costs and labor associated with manually tracking hourly employees’ time.

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“If you don’t get time and attendance right, you leave money on the table, either by overpaying people, which is not good for business, or by underpaying people, which makes them tend to leave you,” said Thomas Otter, research vice president at Gartner Inc., an analyst group based in Stamford, Conn. “It’s one of those areas that has been around for a long time because the reasons why it’s done haven’t changed.” Those reasons, according to Otter, include increased compliance demands and complex union requirements, along with the desire to find more innovative ways of capturing time information and scheduling time by using collaborative technologies.

One of the longstanding benefits of time and attendance software, which is either a specialized platform or part of an integrated enterprise suite, is the elimination of manual processes. And that, in turn, helps reduce human error, rework and payroll mistakes that can lead to unnecessary overpayments. According to a survey conducted by Boston-based Nucleus Research Inc., companies that don’t have automated time and attendance systems tend to overpay their employees 1.2% on average. By enforcing data accuracy, Nucleus found, the software helps eliminate such common problems as buddy punching, where an employee clocks in for a co-worker who hasn’t arrived on-site; clock rounding, in which an employee punches in for work before his shift officially starts, leading to additional costs; and general inconsistencies related to payroll and the uneven application of absenteeism rules.

New time and attendance technologies

While time and attendance systems have remained pretty stable, new technology is pushing the benefits to the next level. For example, biometrics, mobile computing and Software as a Service (SaaS) delivery models are changing how the software is deployed while broadening the scope of the core time and attendance platform. Integrated scheduling capabilities and in some cases, analytics are two such new capabilities that promise additional benefits to organizations as they strive to optimize workforce costs.

“Time and attendance software can transform the way companies think about managing their hourly workforce, helping them better understand workers, put people in the right places and dramatically reduce overtime because they know what is happening in payroll on nearly a real-time basis,” said Rebecca Wettemann, vice president of research at Nucleus Research. “New capabilities will alert managers so they can reschedule folks on the fly in order to avoid paying overtime.”

New self-service capabilities in areas like scheduling and shift management should be particularly interesting to organizations, according to Katherine Jones, an analyst with Bersin & Associates, an Oakland, Calif., consultancy that specializes in human resources research. Consider waitstaff at a restaurant chain, who have nonstandard hours and on occasion, want to make a switch. Instead of managers spending time looking for replacements, new shift management capabilities in time and attendance software give them visibility into workers’ schedules and provide communications capabilities so shift trades can easily be made online and accounted for in long-term planning. “Shift trading has been one of the greatest sources of frustration for employees and managers, resulting in lots of miscommunications,” Jones explained.

While some of the newer capabilities, such as SaaS and self service, make the basic functions more accessible, experts caution that time and attendance software still involves a fairly complex deployment. Much of the complexity has to do with the intricate rules engine that must be configured to govern how much employees are paid based on their hours as well as corporate policies and government regulations.

Yet even with this complexity, experts predict time and attendance software will remain a staple while enhancing its value  to businesses. Said Wettemann: “A lot of companies who have done this are now looking at not just how to cut the costs of manual processes, but how to reduce errors and make the workforce more productive instead of just making the workforce punch in on time.”

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