3 Ways Employee Time Tracking Can Save You Money
Labor is often a business owner's biggest line item—and it's a line item made even bigger by unnecessary overtime costs, employee time theft, and buddy punching.
So, how do you make sure your hourly employees are fairly and accurately paid?
Automated time tracking can save business owners thousands of dollars in gross payroll costs each year, just by curbing overtime and ensuring employees are only paid for hours actually worked.
Here are three definitive ways employee time tracking can help small businesses everywhere preserve their bottom line.
1. Curb Overtime
If an employee works more than 40 hours per week, you must pay them overtime — even if that overtime was unauthorized. Yes, overtime can cause your payroll costs to skyrocket, but failing to pay overtime, thus violating FLSA regulations, could (and likely will) result in an even more costly lawsuit.
Fortunately, there's a better way to curb overtime and keep those payroll costs low. Automated time tracking can help you keep an eye on potential overtime hours — so there are no expensive surprises come payroll. Additionally, this technology can help alert both HR professionals, payroll administrators, and employees when their daily or weekly hours limit is approaching. These reminders encourage your employees to clock out when their shift is done, which ultimately fosters a healthy work-life balance (and healthy employee morale!).
2. Minimize Employee Time Theft
A recent survey conducted by TSheets found that 1 in 2 employees admits to time theft by way of adding 15 to 60 minutes to their timesheets each day. And those minutes can add up quickly.
But don't panic just yet. There's a good chance your employees aren't committing time theft maliciously. When in doubt, employees will simply round their timesheets or guesstimate their time worked according to their schedules, rather than actual hours worked. And unfortunately, paper and Excel timesheets leave a lot of room for doubt.
When employees are automatically reminded to clock in and out (and they’re able to do so from anywhere) you can help stop guesstimation in its tracks.
In the long-run, you'll save on gross payroll costs, just by paying employees for every second actually worked.
3. Prevent Buddy Punching
Buddy punching, or the act of one employee clocking in or out for another, costs US business owners $373 million each year.
And like employee time theft, buddy punching usually isn't done maliciously. In most cases, one employee hasn't arrived to work at the scheduled time, so they ask another employee to clock in for them, in the hopes their supervisor on duty won't notice the late arrival.
If you're using paper timesheets or an old-school time clock system, buddy punching is all too easy. But there are workarounds, like requiring employees to clock in from their personal mobile device, coupled with GPS location tracking.
There you have it! Automated time tracking technology can help you curb overtime, minimize time theft, and prevent buddy punching to help you save in gross payroll costs and keep your largest line item in check.
For more information on payment methods and payroll in general, take a look at our comprehensive Payroll Guide.
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