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Time Clocking: How and When to Use It?

time clocking
 
8 minute read
Date
17/07/2024

Time clocking is the act of recording the number of hours each employee works.

Traditionally, time clocking was achieved via a time clock machine and physical “punch cards.” However, a digital and online time-clocking system is now the preferred option (or a combination of both). This is because it offers greater accuracy and flexibility in how staff clock their time.

Online time clocking greatly improves fairness in the workplace by accurately tracking employee hours, ensuring fair compensation, and promoting transparency.


Why Online Time Clocking Should Always Be Used

To gain a full picture of how an organization’s time is spent, time clocking should always be used. Doing so creates several benefits for both the organization and the workforce.

1. Increased Accountability

Online time clocking improves staff accountability. With a manual system, organizations can’t be sure that staff have logged their hours correctly. This could be down to genuine human error or deliberate manipulation.

However, online time clocking is sophisticated and provides multiple ways for staff to clock time (such as via a mobile app, a browser, or clock terminals). This provides real-time data to show what staff are doing and when they are doing it.

When staff members are aware that their time is being monitored, they are more likely to account for their absences and meet their deadlines. Furthermore, it promotes a culture of responsibility and punctuality throughout the organization.

2. Time Theft Reduction

One of the biggest problems with manual time clocking is that it's easy for staff to overstate the number of hours they have worked, a practice known as “time theft.”

Additionally, it allows staff to engage in another practice called “buddy punching.” In buddy punching, one staff member clocks in on behalf of another.

Both of these activities have a detrimental effect on productivity. Plus, time theft is estimated to cost businesses billions of dollars each year.

Online time clocking removes the ability to buddy punch. It also makes it significantly harder for staff members to clock more hours than they have actually worked

3. Boosts Employee Morale and Prevents Burnout

Employees remain motivated when they feel they are being properly – and fairly compensated – for the hours they have worked.

Maintaining a good work/life balance is vital. This is especially true for industries relying on shift work and where it's easy for staff to become overworked and suffer from burnout.

Time clocking helps maintain that balance and establish a fair working environment, awhile providing the accurate data required to correctly compensate employees.

Interestingly, the data can also be used to provide morale-boosting incentives. For example, time-clocking systems can be used to discover which employees consistently put in extra effort or identify those who are impeccable with their timekeeping.

Rewarding exceptional employees appropriately recognizes their hard work. When incentives are on the table, it also encourages other employees to achieve higher standards.

This has an added side benefit. Employees who feel appreciated are less likely to look for work elsewhere. This increases the organization's staff retention rates and means it has to spend less on recruitment.

4. Reduces Administrative Burdens

Manual time clocking is a serious administrative burden, especially in larger organizations.

Reviewing, approving, and disputing time cards takes a lot of time. Then, the data has to be manually inputted. This takes up valuable resources within HR that could be better applied elsewhere.

Automated time-clocking software can rectify this problem in one go. It reduces the administrative burden down to mere minutes, saving HR departments significant time.

5. Ensures Compliance

Labor laws are serious business and all organizations must ensure they are fully complying with them. This includes providing sufficient break times, managing overtime, and properly compensating staff.

Time clocking makes it simple to manage these things. It provides a transparent paper trail that proves the organization is in full compliance with the law.

How an Online Time-Clocking System Can Be Used

1. Effective Time Management

Organizations that use time clocking can better manage time, workloads, and attendance:

  • Having a detailed breakdown of how and where time is spent allows organizations to create effective time strategies. For example, staggering lunch breaks or limiting remote work at certain times.
  • Attendance data for each staff member can be analyzed. This allows supervisors to address lateness issues and enforce attendance policies.
  • Absence tracking enables supervisors to recognize when to allocate additional resources. It also shows patterns of extended or unauthorized absences. Understanding this allows supervisors to intervene as required.
  • Organizations can analyze hours worked against outputs to quickly identify workload imbalances. Then, they can redistribute tasks so employees don’t feel like they have to continuously clock overtime hours just to get the job done.
  • The data can also be used to determine which staff members are consistently failing to meet productivity standards. When this is understood, supervisors can quickly put improvement measures in place.
  • Finally, organizations can see where time is wasted. This lets them reorganize to use it better. For example, if employees spend too long traveling for meetings, it may be faster to hold video calls instead.

2. Payroll Processing

One key reason for time clocking is to accurately calculate the compensation each employee should receive for their work hours.

Most online time-clocking systems integrate seamlessly with payroll platforms, allowing data to transfer automatically from one platform to another. The data contains everything a payroll system needs to know, including detailed breakdowns of clock-in and out times, overtime, absences, PTO, and more.

The end result is automated salary calculations. These ensure that employees are paid correctly and promptly. It also lessens the likelihood of a costly pay dispute occurring.

3. Schedule Optimization

Certain industries rely on shift patterns (such as hospitality and healthcare). They use them to ensure there is enough staff throughout the working day.

Often, it's challenging to organize and manage shifts, especially when staff unexpectedly call in absent.

Time clocking is a valuable tool in helping optimize schedules. For example, automated shift handling allows organizations to define the rules for shift patterns. Using this information, the system will assign workers accordingly. 

Time clock calendars automatically map out employees’ shifts. This allows supervisors to analyze and make real-time adjustments as required.

Also, online time-clocking systems have absent management tools. These let employees request time off, and supervisors can accept or reject it at the click of a button.

Employees will appreciate this transparent approach to shift management. It prevents staff from becoming overworked or underutilized. The main benefit is that an organization’s staff will feel they have a good work/life balance, which, in turn, boosts morale and motivation.

4. Promoting Flexibility and Remote Working

Remote work has an incredible number of benefits for workers and organizations, but it has drawbacks too.

One of the biggest concerns for businesses is the lack of oversight regarding when and where their employees work.

Clocking in via a mobile app or browser solves this issue. It reassures organizations that their remote staff are working their required hours.

Geofencing can control problems like buddy punching by only allowing individuals to clock in at certain locations, such as their home address.

The big advantage is that it enables organizations to provide a flexible work environment and offer remote work possibilities, something that is highly sought after among job seekers.

Also, if an organization offers great working conditions, it can attract better talent for its available roles.

5. Real-Time Data Analysis

Real-time time-clocking data is essential for several reasons.

  • It enables managers and supervisors to generate accurate and up-to-date reports at the click of a button. These reports can then be sent to payroll to ensure employees are correctly compensated.
  • It allows organizations to analyze labor costs against budgets, enabling them to forecast future budgets and labor requirements more accurately.
  • The data can be used to determine productivity rates. Improved workflows or processes can then be implemented where efficiency bottlenecks are found.
  • The data provides a transparent paper trail for compliance and auditing purposes.

Time clocking should empower employees

Time-clocking is often perceived as negative among the workforce. This is due to concerns about micromanagement or invasive monitoring.

With this in mind, organizations must use time-clocking to achieve positive outcomes. It should not be used to instill fear in employees.

The truth is that time-clocking benefits employees just as much as it does the organization. When used well, time-clocking systems empower employees. They ensure fair pay and foster productive, motivating work environments.

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