In a growing business, the day will eventually come when managing time and attendance on paper becomes both inefficient and risky, especially when trying to balance things like overtime, paid time off and myriad regulations. “It usually happens when companies reach 50 employees,” said Jose Gaona, vice president of product strategy for Replicon Inc., a cloud-based time tracking applications provider. “At that point it becomes too complex to do.”
Workforce Management: It Takes Time — and Effort by Deloitte's Lisa Disselkamp
It can also get extremely time-consuming, with human resources staff spending hours each week manually tracking time sheets or punch cards, and transitioning that data over to payroll. Gaona recalls working with a health care facility that processed 10,000 employees' monthly payroll and had a manual time-keeping system.
“They had 10 people involved with processing time,” he said. Beginning two weeks in advance, the team would sit at a conference table and sort through piles of time cards, and then pass their work to the person next to them to check for accuracy. “And because they had to start two weeks in advance, they had to forecast the last two weeks of every month,” he said. Once they implemented an automated time and attendance system, that process went from two weeks to three days, and from 10 people to two. “It had a huge impact.”
- Don’t automate everything. A good time and attendance system will automate tedious tasks, like tracking data and generating reports, but you still need a human touch to do things like accommodate individual schedule goals or to adapt the schedule to accommodate short-term ebbs and flows in workforce planning.
- A major obstacle in this journey is that time and attendance has four stakeholders — payroll, IT, finance and operations, said Deloitte Consulting’s Lisa Disselkamp. “You need to choose a single owner, or the process will be driven by the individual with the most influence.”
Along with time-savings, automated time and attendance systems can also eliminate errors, uncover time theft and, most importantly, help with compliance. “When we talk to companies, the No. 1 issue they are concerned about is compliance,” said Richard Allaway, general manager of ADP small-business services. A recent survey from ADP shows that 35 percent of respondents say they spend more time today on human capital management-related compliance tracking than they did two years ago. And it will only get worse. “The HR landscape has gotten incredibly complex regarding state and federal regulations, and if employers don’t stay in compliance with all of them, they face fines, penalties and even lawsuits,” he said.
According to PricewaterhouseCoopers’ 2015 Global CEO survey, 78 percent of CEOs are concerned with over-regulation and its effect on their ability to achieve their companies’ strategies. This is especially true for small businesses that spend up to 80 percent more per employee on federal regulatory compliance than large companies, according to a U.S. Small Business Administration survey.
An automated time and attendance system that is linked to payroll can reduce the risk of compliance issues because it provides the transparency and data management tools that companies need to track and audit their scheduling and overtime to ensure compliance with the Affordable Care Act, Family and Medical Leave Act, local rules and union contracts.
- Consider a point system to deal with chronically late employees. Start every employee with five points, and take one away when they are late, then every six months add an additional point to their banks. Establish appropriate disciplinary measures for those who run out of points.
- 'Think of time as an asset,' Replicon Inc.'s Jose Gaona said. You wouldn't throw away valuable products of resources, so give the same respect for your team's time.
Value vs. Risk
Though if you want to get the most value from a time and attendance system, you need to think bigger than just compliance, said Lisa Disselkamp, director of HR transformation for Deloitte Consulting. “Time and attendance shouldn’t be treated as a back-office function,” she said. “It should be positioned as a driver of business outcomes.”
If companies want to get the most out of these tools and processes, they should align scheduling and attendance strategies with business goals that have measurable outcomes such as improved productivity, increased employee engagement, better customer satisfaction or reduction of operating costs. “When you focus on what you are trying to accomplish as a business, it reframes the conversation,” she said.
For example, if employee engagement is the goal, you might focus on creating schedules that are more predictable, consistent and adequate so employees can better plan their lives and budgets and reduce use of sick days and shift trading. “It creates shared value for the employees and the employer,” Disselkamp said.
Regardless of your business goals, it’s important to do your due diligence before implementing any time and attendance system. That means making sure you understand your pain points, what you want to accomplish and how you are going to measure the impact of a new system. And recognize that it is going to require a change in the way you operate, Disselkamp said. “It will feel disruptive at first, but in the long term it will add a lot of benefit.”
TIME AND ATTENDANCE CHECKLIST
- Once you hit 50 employees, it makes sense to transition to an automated time and
- attendance system.
- To measure the return on investment of a new system, factor time saved, compliance risk, “time theft,” and unexpected overtime into the equation.
- Update your scheduling process, and rules around attendance before choosing a tool.
- Choose a system that can grow with you and adapt to constantly changing regulations.
Organize the data. Gather all of your historical data on scheduling as well as documentation on attendance rules, payroll guidelines, union agreements and any other documents that influence time and attendance. “If all this data isn’t in place, the transition will be a lot more complicated,” Replicon’s Gaona said.
Review your process. Think about things like how you assign schedules, track time/overtime, and keep track of tardiness and vacation days, then consider whether you want to make improvements, said Joe Wang, chief services officer of ServicePower. “You want processes that clearly define what is expected, and when and where you will make exceptions.” Consider whether you want to update rules around how schedules are assigned, and the way you deal with employees who are chronically late, Wang said.
Look at the regulations. One of the biggest goals for time and attendance programs is to achieve and prove compliance. Before choosing a system, identify the rules you need to comply with, the data you will need to collect, and which systems will need to be integrated to achieve those goals, said Andrew Shopsowitz, manager of product strategy for Ceridian HCM Inc. “If you don’t link time, scheduling, payroll and benefits together, it can be hard to stay in compliance.”
Find the hidden roadblocks. Do an audit of every aspect of your time and attendance process, with a focus on “home grown” solutions that individuals create as workarounds, Disselkamp said. For example, the manager who does all scheduling on paper, then enters the data later into the system, or allows shift changes without documenting them. “If those hidden systems remain, it will impact your outcomes,” she said.
Set a baseline. Measure the time spent doing time and attendance today, including the costs associated with fixing errors, moving data from one system to another and compliance-related penalties. Use these as benchmarks to prove the effectiveness of the new system.
Set expectations. Figure out how time and attendance aligns with the business strategy, then establish key performance indicators — i.e. improved productivity, reduced turnover, lower operating costs. “When you know the outcome you want to achieve, you can plan back from that,” Disselkamp said.
Assemble a shortlist of vendors. Focus on core functionality, like whether it is cloud-based, has mobile functions, is customizable by users and integrates with your broader HR management system. Then look at usability and performance. “It needs to be user-friendly or you won’t get buy in from managers,” Shopsowitz said.
Involve managers in the review process. If they are the ones who will use the tool, they have to like how it works.
Review reporting tools.The best solutions will give you real-time insight and alerts related to key performance indicators, like increased overtime, or too many hours for part-time workers. “You don’t want to review that data two weeks after it happened,” Shopsowitz said. “You want that feedback in real time if you are going to avoid compliance issues.”
Make vendors prove themselves. Don’t let the system drive the process, Disselkamp said. “Tell your vendors the outcomes you are looking for, then have them show you the features that will help you achieve those results.”
Think about the future. Choose a vendor and system that can grow with your company and be easily adapted to accommodate new regulations, employees and scheduling strategies. You don’t want to be locked into a system that doesn’t meet your needs in three years.
Make an app for that. Take advantage of mobility features to give managers and employees the freedom to check schedules on the fly. “You want a system that can be used where the work happens,” Disselkamp said.
Train employees to use the system. The only way to get value from a new time and attendance tool is if managers use it effectively. Provide training and support tools in a variety of formats (e.g., live classes, Web-based modules and help desk support) to make sure they have the confidence to embrace the new software.
Communicate. Once you choose a tool and/or a new process, tell your workforce what the changes are, how they will work, and how they will benefit the employee and the organization, Wang said. “If employees understand why you are making a change to your time and attendance program, it will feel less like Big Brother is watching them.”
Measure results against key performance indicators. Six to 12 months after you implement the system, gather data to review impact. Have you cut overtime? Improved engagement? More effectively aligned schedules to the flow of business? Quantifying the effectiveness of the system will help tie HR investments to strategic business outcomes.
Track adoption. Make sure managers and the HR team are using the tool effectively, including data analytics features to support real-time decision-making, and ensure rules and regulations are being met. Consider offering additional training or incentives if adoption is low.
Communicate results across the business. Share impact data with the executive team, managers and front-line workers, and customize your communication to the relevance of your audience, such as financial benefits to your CEO or chief financial officer, or more consistent schedules to employees and managers.
Use the data to build your brand. Reductions in turnover, improved employee satisfaction, and greater predictability in scheduling are all value-driven outcomes that can help you establish the company as an employer of choice.
Do something with the savings. Have a plan for how you will use the time or money saved as a result of the new system, Disselkamp said. Then communicate that plan to the company. “It helps people understand how they are contributing to the business, and that can be very empowering.”
- Collect all of your employee and regulatory documentation.
- Revise any time-and-attendance rules or processes that are creating inefficiencies.
- Identify current and future regulations that directly affect your business.
- Look for homegrown processes (i.e., custom spreadsheets used for time tracking) that need to be incorporated into your new system.
- Define strategic business outcomes (i.e., reduced overtime and improved engagement) and set a baseline to measure results.
- Assemble a shortlist of vendors that offer the features to meet your needs. Consider including mobile options, real-time reporting, and software-as-a-service on the list.
- Involve managers in the review process to secure buy-in and prove usability.
- Look for tools that offer alerts when you fall out of compliance with regulations or internally set rules.
- Choose a system that can grow with you and adapt to changing regulations.
- Teach employees to use the tool, and explain your business goals for choosing it.
- Measure results against key performance indicators, focusing on things like time and money saved, improved retention and greater accountability.
- Share results with the executive team, managers and front-line workers.
- Make sure managers are using the tool effectively, and offer training, incentives and deadlines to encourage adoption.
- Use results to attract new employees and establish yourself as an employer of choice.
- Reinvest the money and time saved into new initiatives or incentives, and let employees know the role they played in making those programs happen.