Just like all workplace technologies, automated time tracking software has its pros and cons.

Obviously, we are advocates of automated time tracking in the workplace. However, we want workplace managers to make an informed decision before adopting any time tracking technology. That involves knowing the pros and cons, the advantages and disadvantages, the positives and the negatives. We are yet to encounter a business that is inherently incompatible with time tracking, but it’s still best practice to provide full disclosure.

We compiled both the upsides and the downsides to help you decide whether automated time tracking is a good fit for your business.

The Cons of Automated Time Tracking

The possibility of employee pushback against the changes that you will implement in your organization’s policies and procedures is always present. It’s no different with automated time tracking. Being aware of this will make you more cognizant to your employees’ concerns and enable you to address these objections proactively.

Recognizing the downsides to automated time tracking can actually work to your advantage. It allows you to identify possible points of employee resistance and anticipate where cracks can form in your new system.

This gives you the opportunity to put together a strategy to minimize the following:

 

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Employee Paranoia

In an article entitled The Spy Who Fired Me, author Esther Kaplan threads together several anecdotes and expert testimonies on the negative effect of workplace monitoring. One of her sources John Aiello of Rutgers University, explains the correlations between workplace stress and workplace monitoring.

“In virtually every study it was the case that people felt greater stress in a monitored environment than not,” he said. “And the more closely they were monitored, the greater the stress.” He added: “If you monitor someone very closely, and previously they had the feeling that you trusted them, they may no longer have that feeling.”

Employee stress due to a feeling of mistrust is bad news for your business.

According to the Global Benefits Attitudes Survey, employee disengagement increases when employees are stressed. This poses a serious financial repercussion for your business as disengagement is estimated to cost U.S. companies between $450 billion to $550 billion annually.

Clearly, employee paranoia should be considered while planning to implement automated time tracking for your business.

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Managers Spending Too Much Time Monitoring Time

Ideally, the information collected using automated time tracking software should be available to managers whenever they want to access the data. However, there have been reported instances when managers get too fixated reviewing their team’s time logs, creating busy and unproductive work along the way.

Managers should be given specific training on when and how frequent they should access their team’s time logs. As much as possible, this should only be confined when diagnosing project-specific issues such as managing timelines and project costs.

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Reductionism

Reductionism is defined as simplifying complex things into simpler terms.

Where does the danger of reductionism in time tracking lie?

When looking at time tracking reports, managers see how long it took employees to accomplish specific tasks, but they don’t really show the several steps between point A and point B. This poses a potential loss in opportunities to optimize workflows for better efficiency. It can also cause a decline in employee morale as employees may feel that their work is not evaluated or appreciated in its totality.

To avoid this, select a time tracking platform that is fully customizable to track the granular details of your projects. If you’re currently using a project management software, find a time tracking system that can seamlessly integrate with it.

The Pros of Automated Time Tracking

From the Code of Hammurabi used in Ancient Egypt, to 1888 when Le Grand Bundy invented the Bundy Clock, to today’s automated software — time tracking has existed for centuries.

In the past, time tracking was primarily, if not solely used for the purpose of payroll calculation. As time tracking technology advances and with 25% of companies using time tracking applications, business owners have started to realize the impact of time tracking in other areas of their business.

Here, we’re going to look at 3 business areas where time tracking makes a positive impact: productivity, profitability, and HR efficiency.

Boost Productivity

Monitoring technology such as time tracking software will have ethical grey areas. Therefore, the question is this: What spells the difference between a business that enjoys the productivity benefits of automated time tracking and a business that creates paranoia among its employees?

It will ultimately depend on how the technology is planned, rolled out, and implemented. Below are some tips to get the buy-in of your employees and eliminate the fear of paranoia:

  • Get employee feedback during the planning stage. Gather your team to discuss your plan about using automated time tracking software. Ask them about their objections and hesitations, and what you can do to address them.
  • Be transparent. Paranoia will be exacerbated if your employees feel something is being hidden from them. When it comes to introducing a disruptive change, go the route of complete transparency. Explain exactly what software you’re going to use, the data that will be collected, how you’re going to use the information, and what access your employees are going to have to this data.

So, how does time tracking improve productivity?

Monitor and Minimize Non-Essential Tasks

Studies have shown that an average employee spends more than 2.5 hours reading emails and organizing their email inboxes on a day-to-day basis. Meanwhile, a survey of executives revealed 67% of company meetings are unproductive.

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Percent of company meetings that are unproductive.

Without time tracking, it is difficult to know how much time your own company is spending on these tasks. Your business may be experiencing severe productivity leaks right now that you’re not aware of. With automated time tracking, you are able to easily collect, organize, and analyze this data in order to take the necessary steps to prevent further time wastage.

Identify and Eliminate Workflow Bottlenecks

Automated time tracking software allows you to track granular details of your day to day operations. You can break down campaigns into projects, projects into tasks, and tasks into deliverables. Having the ability to track how much time is consumed at each step of the workflow will help you identify specific bottlenecks.

Prevent Multitasking

Another way that automated time tracking boosts productivity is by minimizing multitasking. It may sound counterintuitive, but in reality, data shows that multitasking reduces productivity as opposed to increasing it. Since a time tracking software monitors one activity at a time, it fosters the habit of just focusing on one thing, thereby helping to eventually minimize multitasking.

Improve/Maintain Profitability

Time is money.

Regardless of your products/services, industry, and workforce size, how your employees spend their time is directly correlated to how profitable your business is. How? For two primary reasons.

  • First, the amount of time spent in creating your products and delivering your services is a primary determinant of your pricing. Automated time tracking allows you to accurately compare how much time your employees are spending versus how much you are charging for your products and services. This provides greater visibility into the employee costs involved and aids you in developing a profitable pricing strategy.
  • Second, if you’re in the professional services industry, your revenue primarily depends on your billable hours. A survey among businesses in the U.S. revealed that they lose about $7.4 billion per day cumulatively due to unbilled hours, primarily due to inaccuracies in manual or traditional time tracking systems. Most manual timesheets are accomplished and submitted on a weekly basis, and only a little over 25% of employees are confident that their manual time entries are accurate. Further, the majority of employees who were surveyed found filling out manual timesheets cumbersome, leading to more inaccuracies.

A time tracking software simplifies this process. Most time tracking solutions are customizable. You can pre-program a list of billable tasks in your system. All your employees need to do is to select the appropriate task from a dropdown list. Moreover, most time tracking software have mobile apps so employees can accurately log their billable hours wherever they are.

Streamline HR Functions

Time tracking typically falls under the responsibility of the HR department. However, even without a separate HR team, time tracking can still help streamline the following HR functions no matter who’s doing them.

Accurate Recording and Monitoring of PTO Accrual

81% of full-time employees consider paid time off an important factor when evaluating a job offer. Making sure that PTO accrual is recorded, calculated, and monitored efficiently and accurately is crucial.

Aside from monitoring the number of hours employees worked, advanced time tracking software can automatically record PTO accruals. These systems are fully customizable depending on a company’s PTO accrual policy. The software can also be a self-service kiosk where employees can track their accumulated PTO hours and file for paid leaves for approval.

Error-Free and Timely Payroll

According to the Workforce Institute, 54% or 82 million Americans have experienced paycheck errors in their career. For employees who are living paycheck to paycheck, this could have serious financial repercussions regarding late payments (e.g., utility bills, home mortgage, car loan, student loan, etc.). This is why it comes as no surprise that according to the American Payroll Association, 49% of employees will quit their jobs after receiving just 2 erroneous paychecks.

Automated time tracking helps solve this problem. It minimizes human error, both in terms of how employees are logging their time and how you’re totaling the number of hours that your employees worked.

A time tracking software also factors in other things such as overtime pay and terms of collective bargaining agreements. The software automatically integrates these elements into how payroll is calculated, which minimizes payroll disputes.

Automated Time Tracking: It’s Your Choice

Automated time tracking can help businesses get the most out of their human capital investment by making sure that employees are spending their time wisely while at work.

However, the benefits of a time tracking software cannot be fully realized without having an implementation strategy in place. Your organization should be open and ready to adapt to the changes that need to happen in order for automated time tracking to be effective, and avoid the cons listed above.

At the end of the day, using a new workplace technology will always carry with it some risks. With this guide and your knowledge of how your organization operates, your work culture, and your employees, you are the most qualified person to determine whether the benefits of automated time tracking outweigh the risks.

 

Dean Mathews is the founder and CEO of OnTheClock, an online employee time tracking app that helps over 8,000 companies worldwide track time.

Dean has over 20 years of experience designing and developing business apps. He views software development as a form of art. If the artist creates a masterpiece, many peoples lives are touched and changed for the better.

When he is not perfecting time tracking, Dean enjoys expanding his faith, spending time with family and friends, and finding ways to make the world just a little better. You can find Dean on LinkedIn.

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