It happens at restaurants and nursing homes, amusement parks and medical facilities. Regardless of industry or profession, employees often believe they are entitled to be paid for their scheduled hours, rather than the time they actually work. Even dedicated employees admit they occasionally “squeeze out a little longer lunch break,” or perhaps, “roll in a bit late” or exit “just shy of 5 p.m.” And, while a few minutes here and there may seem like no big deal, reports from the American Payroll Association (APA) show otherwise. In studies conducted by the Robert Half Agency, the APA found the average employee stealing 4.5 hours each week through tardy arrivals, early departures and extended lunches or breaks. On an annual basis, that’s a six-week paid vacation for every employee. Or, as the U.S. Chamber of Commerce puts it: between two and five percent of a company’s annual employee earnings.

While traditional time-tracking methods, such as time clocks and manually-compiled time sheets provide a record of employee hours, they do so without checks and balances that ensure accuracy. Concerns about employees rounding up hours or unintentionally forgetting about sick or personal days are not unfounded. Even with electronic time clocks, there is no protection against “buddy-punching,” where unscrupulous employees punch in for their tardy or absent co-workers.

Up Against the Clock
More organizations are turning to automated time-tracking systems, not simply because of integrity issues, but because of a number of other benefits they deliver. Many businesses realize substantial savings by eliminating time-consuming and error-prone tasks. For example, the mere adding and auditing of employee time cards takes about five minutes per card, according to the APA. Add in the time employees waste compiling and collecting timesheets; tack on additional time to recalculate errors; and according to the APA, it can cost a company up to eight percent of its gross annual payroll.

In addition to data accuracy and reductions in wasted time and costly errors, proponents also credit time and attendance software with —

• Supply cost reductions.
• Simplified scheduling.
• Enhanced worker productivity and morale.
• Documentation to prove compliance with wage and hour laws.
• Easy access to management information.

As such, time-tracking software systems are adding value to all types of businesses by strengthening their abilities to focus on core competencies.

Time is Money
The most efficient time and attendance solutions are those that seamlessly integrate with small business accounting and payroll software (e.g., QuickBooks, ACCPAC, Peachtree and Paychex). Also valuable are those that offer management and/or customized reporting capabilities. And some systems offer additional modules to capture other labor-related data, which is worth exploring if employees are reassigned to various jobs or departments; or if production issues are factors your organization needs to measure.

Making Cents of Time
Selecting the time and attendance software system right for your organization starts by determining the type of data collection device preferred. Among the most popular are magnetic and bar-code readers; proximity badge readers; and biometric sensors and scanners.

Card-Based. These tracking devices include magnetic or bar-code badge card readers. As with traditional time-clock systems, employees punch-in and out by “swiping” credit card-style badges through a terminal. The process, both simple and familiar, is readily accepted by employees. However, there are drawbacks: Magnetic strip cards are susceptible to damage, while bar-code cards can be easily duplicated at a copy machine; and both can be shared or lost.

Proximity-Based Tokens. Similar to card systems, these devices identify the item rather than the employee, but do so by being “waved at” rather than “entered into” a terminal, which can be important for large organizations where fast or frequent tracking is an issue. Tokens are also sturdier and less likely to require replacement due to damage than their card-based counterparts. But, like all “accessory-type” systems, they can be lost, stolen, or shared, and they do not prevent co-workers from logging in for one another.

Biometric-Based. These are the most secure and use sensor or scanning device systems to analyze a unique physiological trait. Those commonly used in business applications include iris, retina, hand, voice and fingerprint recognition. With fingerprint recognition, for example, employees simply double tap a sensor, which then captures, extracts and compares the input to an original sample taken during an enrollment period. The final step involves matching the entered data with the original sample stored in the system. As with all biometric systems, the objective is to resolve a pattern recognition problem in order to separate forgeries from originals. It is a quick process that takes but a matter of seconds to reliably authenticate an individual’s identity. The advantages of these “recognition” systems are that they combine security with time collection all in one unit; and they require no supplies to buy, lose, share or replace.

On the downside, there are occasions when the “reading” may be difficult. And in some cases, there are employee reservations based on initial impressions that the technology is too invasive, which can affect employee buy-in. However, with employee education, resistance is easily overcome, particularly if your organization elects to work with one of the vendors that takes privacy issues very seriously. For example, some fingerprint recognition applications use technologies that store only encrypted, numeric representations of a digital image, thereby eliminating the ability to share, reproduce or duplicate information.

Attending to the Facts
As president of the National Time Equipment Association, Ron Henricksen has the insider’s view on how these advanced technologies are impacting U.S. business:

“Today’s time and attendance systems bring a new level of convenience and data integrity to the table. But, with so many new technologies flooding the marketplace at a record pace, companies need to be conscientious in their selections. Make sure you know the track record of the vendor; if it provides customer support; has a reasonable maintenance plan; and offers add-on modules your organization may need if your business or staff expands. Those that do their research will enjoy a quick return on their investment.”

To help out those interested in evaluating their options, Henricksen offers the following checklist:

About the Author
Judith Katz is the co-founder, president and CEO of Count Me In, LLC, an award-winning developer of software solutions incorporated with biometrics for the small to mid-size business market located in Mount Prospect, Illinois. She oversees operations, marketing, R&D and business development. Judith can be reached at Judith@countmeinllc.com.