Tracking employee attendance is important for more than just processing your payroll. With the proper employee attendance tracking equipment, business owners can acquire valuable insights into company health. Learn about the equipment you need to maximize your business's productivity and how to shop for the right items to track employee attendance at your company.
What is an employee attendance tracker?
An employee attendance tracker is equipment, software or a combination of both items that is utilized by a business to track the hours an employee works. An attendance tracker clocks time in and out each day, as well as meals and other breaks throughout the day. Some attendance trackers also monitor sick days taken, personal time on the books and how much paid time off (PTO) an employee has accrued.
Equipment needed for employee attendance tracking
For many businesses, it is not necessary or realistic to buy a time and attendance system with every feature available. The size of your company plays a part in the type of time and attendance software you will need.
Small businesses
Small businesses usually have simple timekeeping needs: They just need to track when someone comes and goes, as well as how much sick or personal time has been taken. Although some small businesses require additional equipment features, they primarily need a time and attendance system that will keep accurate attendance records and ensure legal compliance.
"[Small companies] have [fewer] employees than a larger organization and therefore have less of a need to implement a solution with capabilities to support multiple locations, different employee types, and layers of management," said Josh Mazza, product manager at Paychex. "Smaller companies typically need a solution that is not disruptive and [is] extremely simple for someone to record their worked hours."
Editor's note: Looking for a time and attendance system for your business? Fill out the below questionnaire to have our vendor partners contact you with free information.
Large companies
Large enterprises require many additional features to meet a variety of business needs. Tasks such as time clocking, payroll and scheduling are too time-consuming for large companies to track manually. For extremely large organizations, PTO, sick days, and other job costs would be difficult and too time-consuming to accurately track by hand.
"Larger companies require more complex system functionality to automate manual processes and security elements to ensure their employees are accurately reporting their time worked," Mazza said. "The solution must balance meeting these needs while still being easy for employees to use."
Necessary equipment based on industry
Another important factor in your attendance-tracking needs is your industry. For example, the type of time collection method you use will depend on whether the employees in your industry are onsite or remote. Here are some common industries and their basic attendance-tracking equipment needs.
In-office (e.g., finance, banking, marketing, all desk jobs)
In-office employees can use a PIN or an RFID badge to track their time via web browser or stationary time clock. Features like payroll integration, scheduling and attendance tracking are necessary. Interactive voice response (IVR) systems and biometric clocks can be useful when higher security is necessary, like in the finance and government industries.
Retail and hospitality
In these industries, onsite time clocks are most desirable, as job function and performance are directly tied to being present. Security levels are not as crucial here, so employers can opt for lower-level security options such as RFID badges or PINs. Since hours are less consistent than in other industries, scheduling and time-off features are very important. Mazza said these industries need more in-depth scheduling tools to reference historical data, allowing them to budget workers and build schedules based on how busy they were in prior years.
Manufacturing
In the manufacturing industry, biometric time clocks are most reliable and minimize buddy-punching incidents. Since employees in these industries typically report to the same location every day, a mounted time clock or tablet kiosk is a viable option. Employee self-service and integrated payroll are useful because payment may vary by job output.
Construction
A mobile clock option is necessary for employees in the construction industry, as work sites often change. Employees also need an added scheduling feature to allow them to see which work sites they must report to and which tasks are required at each site. Mazza said geofencing and geolocation capabilities are useful because they provide employers with the peace of mind that their employees are working where they should be each day.
Trucking
Trucking employees require the flexibility of a mobile time clock option. Because the industry consists of primarily remote workers who are constantly on the go, an employee self-service feature is essential for drivers to track their routes, schedules and hours on the road. Features such as remote clocking and payroll integration enable trucking professionals to accurately report and receive payment for miles driven, gas and tolls.
Features to look for in employee time and attendance trackers
There is a wide variety of valuable time and attendance system features that can benefit your business. Here are some of the top features to look for when considering your needs.
Time tracking
The most basic use of a time and attendance system is the ability to keep a log of the hours an employee works. There are various time clock options that can integrate with attendance systems, such as RFID card readers, PIN entry, IVR, mobile and online applications, and biometric clocks (fingerprint scanners and facial or iris recognition). Older time-tracking methods, such as punch cards, are less likely to integrate with these tools.
Scheduling and attendance tracking
Another important feature is the option for employee scheduling and attendance tracking. This allows you to use one fully integrated platform to create employee schedules, record requests, manage sick days and track PTO. It also ensures that you have coverage in the event that someone calls in sick or is on vacation.
Labor distribution and job costing
Many time and attendance systems allow you to view how many hours employees spend on specific projects or jobs, or at certain locations. This feature is primarily used to estimate the cost and labor for future projects. It can also provide insight on who are your most productive workers and which employees might need a little more guidance.
Remote clocking
This feature provides employees with the opportunity to clock in and out remotely. If they are working offsite, employees can still accurately record their hours in real time. This is primarily used in conjunction with online and mobile device applications because they afford the most flexibility.
Employee self-service
A time and attendance system feature that employers might overlook is the option for employee self-service. This is extremely helpful to employees, as it enables them to control time-tracking tasks. Employees can manage their scheduling, review their hours worked and track their PTO accrual.
Payroll integration
These systems can automatically merge your data into a payroll service, such as Paychex or Gusto. The automatic transfer of data reduces the possibility of human error and saves time as well.
Geolocation and geofencing
Geolocation capabilities give employers a way to accurately track employees, as it shows the location of the employee's mobile device. Geofencing is a bit more advanced, as it enables the use of GPS or RFID technology to trigger an alert when a mobile device enters or leaves the virtual work boundary. This automates the process and gives employers peace of mind, allowing them to know where their employees are.
Importance of tracking employee attendance
The best time and attendance systems serve many purposes. First and foremost, they track the amount of time employees are working each day, a practical and vital measure every business must know. In addition, time and attendance solutions accurately obtain important payroll information and ensure employees are accountable for their work. They can also reduce time fraud, increase security, maintain transparency and minimize administrative work.
Warren Steinberg, senior human resources consultant for Sikich, told business.com that most employers should be tracking attendance for compliance reasons. "There are also many systems that offer reporting to help companies cut costs as an added benefit."
Understanding the many uses of employee attendance tracking solutions is essential before you dive into which equipment and features you will need. Here are some things these solutions can help you do:
1. Streamline operations for other departments.
Tracking attendance, particularly with attendance software, can make life easier for many departments. Managers, payroll and HR are just a few of the people and departments in your company that need to get their hands on employee attendance data to conduct their work.
2. Analyze performance with collected data.
How do you know if employee attendance is contributing to good performance in each department? Weighing hours worked against team output, success rates or productivity can be a good measure of whether the investment you are making in these employees is paying off for your business.
3. Identify high and low performers.
Mazza said the data collected by these systems is extremely valuable to business leaders because, among other things, it allows them to measure employee engagement and separate high and low performers.
"Employee attendance provides business owners and HR leaders with valuable insight that measures the overall health of the organization," Mazza said. "Comparing actual hours worked to scheduled hours allows an employer to view data that impacts the business, such as the number of absences, tardiness, and sick days taken in the last week, month, or year."
4. Create performance reviews.
Arriving on time is usually an indicator of good performance. Employee attendance tracking makes it simple for managers to access this data when preparing performance reviews.
5. Maintain coverage.
When an employee requests time off, you may need to find coverage to ensure the work will still get done in their absence. Through employee attendance-tracking tools, you can see who is available to cover a shift or confirm if there are enough employees to cover while someone takes personal time.
6. Support remote work.
Having employees clock in and out remotely can provide assurance that worker productivity is being maintained, especially during the COVID-19 pandemic, when many employees are working from home.
7. Budget for wages.
Attendance tracking keeps precise tabs on the number of hours worked by employees in each department throughout your company. At a glance, you can review this body of data to ensure that you are properly budgeting for salaried and hourly workers.
8. Mitigate staffing issues.
Tracking time is not always about hours worked; it's about what is being done by whom and when. For example, chronic lateness by one employee may force other employees to cover for that late person. With proper tracking, you can catch these issues as they develop instead of stressing out your other employees based on the actions of a single individual.
9. Build your case in employee lawsuits.
The more information you collect and store, the better prepared your company will be in the event a claim or lawsuit is brought against you. These records may be needed if an employee claims they were underpaid, or if you need to fulfill a legal obligation such as paying taxes.
The bottom line on tracking employee attendance
Tracking employee attendance has many benefits, and the necessary equipment depends on each business's needs.
"It really depends on the industry, the size of an organization, the employees and the benefits the employer is looking to get out of the system," Steinberg said. "There is no one-size-fits-all system."
Keep this in mind and analyze your business structure before purchasing time and attendance software.
Stella Morrison contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.