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Choosing a Time and Attendance System: 2017 Guide

Looking for a time and attendance system in 2017? Here's everything you need to know about what a time and attendance system is, what it offers, and how to choose one. If you already know what you're looking for, visit our best picks page to see which ones we recommend, as well as a complete list of others that might work for you.

  • Time and attendance systems allow employees to clock in and out electronically via time clocks, internet-connected computers, mobile devices and telephones.
  • That data then instantly transfers into software that can seamlessly import it into your payroll solution.
  • These systems do much more than just track when employees come and go, though. They also do the following:
    • Monitor mobile employees via geolocation and geofencing
    • Give real-time data on who is working, who is not, who showed up late and who is nearing overtime
    • Manage paid time off (PTO)
    • Create employee schedules
    • Provide managers and business owners with detailed labor data
  • Time and attendance systems feature a self-service that allows employees to handle many time-tracking tasks on their own, including reviewing the hours they've worked, their current and future schedules, and PTO details.
  • Time and attendance systems are offered as cloud-based or on-premises solutions. The on-premises systems are stored on servers within your business, while the cloud-based systems are housed by your time and attendance system provider and accessed online.

Pros and cons: The biggest benefit of these digital systems is they eliminate the need for manual time cards. All the time is collected electronically, with the calculations done for you. This cuts down on the chance of errors. Another positive is that these systems manage all your time needs – employee attendance, PTO and scheduling – in one program.

The biggest drawback to time-tracking systems is that they are more expensive than the old manual method where employees wrote down their hours each day or punched in and out using a paper time card. Another potential downside is that they often force employers to curb the perception that asking their employees to track their time is some form of micromanagement.

What the experts say: "The goal of an automated time and attendance system is to provide a way to track an employee's time," said Warren Steinberg, a techno-al HCM consultant for Executive Alliance. "This can be as basic as tracking working hours or as complex as tracking vacation, leave of absence, holiday and sick time. The most common time systems have an interface that allows employees to clock in and out, either via a kiosk, a laptop, a time clock or even a mobile app. All of the time is tracked in the system and then is reported to a payroll system."

Editor's Note: Looking for information on time and attendance systems? Use the questionnaire below, and our vendor partners will contact you to provide you with the information you need:

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The cost structure of a time and attendance system depends on whether you choose a cloud-based or on-premises solution. Cloud-based systems have smaller recurring monthly costs, while on-premises systems have larger one-time fees.

With on-premises systems, you pay all your costs upfront. You can expect to pay several thousand dollars for the software, licenses for each employee and installation. There aren't any monthly fees for the service after that. However, there typically is no ongoing support or software updates included in your one-time costs.

For a cloud-based system, most services charge a per-user fee that ranges from $1 to $10 per employee, per month. Some services also assess a base monthly charge or a minimum monthly charge.

Some providers also charge a one-time setup and implementation fee. Unlike with on-premises systems, however, all software upgrades and support are included in your monthly expenses.

In addition to eliminating the need to manually track your employees' work hours, there are other benefits to having a time and attendance system:

  1. Financial insight – A time and attendance system provides advanced tracking for job costing and labor distribution, according to Jim Wacek, president of the time and attendance division for Insperity. "It also provides enhanced views of the organization's key performance indicators, including hours and wages, employee counts and scheduled/working status," he said.
  2. Saves money – A detailed look at labor costs and where changes can be made can also be a cost-saving tool. Wacek said businesses can save up to 5 percent of their payroll costs by automating their time and attendance systems.
  3. Real-time information – Matt Rissell, CEO of time and attendance system provider TSheets, said these systems record data as it occurs. "You’re logging hours, job codes and information about breaks and PTO in real time," Rissell said.
  4. Happier employees – These systems can often lower the frustration levels of not just employees, but managers, payroll staff, human resources professionals and owners, Rissell said. "Inaccurate and slow payroll, manual and error-prone duplicate entry, and the inability to track performance, labor costs, job costing and financials is frustrating for everyone within the company," he said.                     
  5. Employee access – Most time and attendance systems can be accessed directly by employees. This allows them to check their hours, request time off and view their schedules. This self-service feature saves members of the human resources department from having to answer employee questions about time and attendance.
  6. Greater accuracy – Steinberg said time and attendance systems provide increased accuracy. "The improved accuracy comes from having a system that can prevent users from entering inaccurate information, as well as require employees to follow policies," Steinberg said.
  7. Overtime calculations – Janet Klamm, director of product management for Paychex, said time and attendance systems remove the hassle of trying to calculate overtime hours. "A time and attendance system will calculate your regular time and overtime for you," Klamm said. "This can be especially helpful for you if you have employees that receive different rates of pay for different types of work."
  8. Insurance benefits – Deborah Sweeney, CEO of MyCorporation, said these systems are great tools for assessing insurance requirements. "Many insurance companies require information about total hours worked by employees," Sweeney said. "Using this software makes obtaining this information simpler."

With so many time and attendance systems on the market, it can be difficult to know which one is right for your business. When you're shopping for a system, our experts highlighted several things you should look for:

  1. Flexible time-tracking options: Look for a system that allows employees to record their hours in multiple ways, such as through an internet-connected computer, smartphone, tablet, time clock or telephone.
  2. Keeps accurate time: The best time and attendance systems ensure employers are paying their employees for the actual time they work, not the hours they're scheduled to work.
  3. Tracks all time issues: Make sure you choose a system that takes care of all your time-related needs, not one that just lets employees punch in and out. This includes managing employee schedules and handling all PTO calculations.
  4. Mobile compatibility: Since many employees and managers work outside the office, you will want a system that is compatible with mobile devices so it is accessible from anywhere. This includes solutions that not only give remote workers the ability to clock in and out, but also track their locations so employers know they're working from where they're supposed to be.
  5. Ease of use: Search for a system that's easy to use, has a clean interface and allows employee self-service.
  6. Integration options: Choose a system that integrates with the applications and software, such as HR and payroll programs, that you already use.
  7. Proactive alerts: Some systems provide notifications when employees are nearing overtime or forget to clock in or out. This can be helpful in controlling business expenses.
  8. Audit trail features: The ability to view original time sheet data along with any changes made by a manager or supervisor can be important in case of an audit.

Now that you've got the basics, you might be ready to make some decisions on which time and attendance system is right for you. To learn about the options we think are best for a variety of business types, check out our best picks for time and attendance systems.

Still have more questions about time and attendance systems? No problem. Here are a number of questions and answers that may help you come to a decision.

Q. How are time and attendance systems different from traditional time clocks?

A. Comparing time clocks to a fully featured time-tracking system is like comparing a bicycle to a sports car, Rissell said. Time clocks require manual entry and rely on a lot of people remembering to do a lot of things every single day.

"And no matter how dedicated, smart or savvy your employees are, they're only human," Rissell said. "Any manual timekeeping system is prone to duplicate entries, guesswork, and a lot of time on the back end collecting and manually entering the data."

On the other hand, time and attendance systems log hours, job codes, and information about breaks and PTO digitally and in real time.

"There’s no guesswork involved," Rissell said. "When payroll rolls around, it literally takes a few minutes to scan, approve and push the time data into your accounting engine to run payroll. Not to mention, cloud-based time tracking also gives you access to an entire set of features you don't have with a manual system."

Q. What type of time clocks are compatible with time and attendance systems?

A. Time clocks come in a variety of options. Gone are the days of simple punch time clocks. Today's time clocks collect time in several different ways, including via punch cards, magnetic swipe cards, bar codes, PINs and biometrics, such as fingerprints or facial scans, said Chris Zian, a product manager of time and labor services for Paychex.

Q. Is there a different between a time and attendance system and a biometric time and attendance system?

A. Any time and attendance system that works with a biometric time clock is a biometric time and attendance system. Because nearly every time and attendance solution that works with physical time clocks offers biometric options, there is very little difference between the two types of systems.

Biometric time clocks are typically used by businesses that are concerned about buddy punching.

"Buddy punching refers to the act of one employee clocking in or out for another," Zian said. "Biometrics are often used to verify who is performing the action."

The only time and attendance systems that don't have biometric options are those that don't incorporate biometric time clocks and instead rely only on computers and mobile devices to punch employees in and out.

Q. Do you have to use a time clock with a time and attendance system?

A. No. Many businesses find it easier and cheaper to have their employees clock in and out only through the computer, mobile app or telephone.

"Every business is different," Rissell said. "There's not one right way to track time. The right way is what's best, easiest and most efficient in a given business."

Not paying the additional costs for a time clock is an appealing option for businesses not worried about buddy punching. Those that are worried about employees clocking in and out for their late or absent peers would be best served by a system that works with a biometric time clock.

Q. Are time and attendance systems only good for businesses with hourly employees?

A. While on the surface it might seem like time and attendance systems are only necessary for businesses with hourly workers, businesses with salaried employees also get tremendous value from these systems, according to Klamm.

"With salaried workers, there isn't the same need to calculate overtime; however, from a business standpoint, there is a lot of value in tracking how they allocate their time," she said. "A business cannot fully understand their costs, nor properly gauge profitability, without tracking their labor costs."

In addition, businesses with salaried employees can benefit from the scheduling and accrual aspects of the system, Klamm said.

Q. How do time and attendance systems work for remote employees?

A. Time and attendance systems use GPS technology to monitor remote employees via mobile devices. Some systems use geofencing to limit where employees can clock in and out from, while others use geolocation technology to record exactly where workers are when they punch in and out.

Some systems use geolocation to track employees throughout the day, not just where they are starting and ending their shifts.

"When an employee changes locations while on the clock, the app records a GPS ping," Rissell said. "When you look at a map or a schedule that's integrated with your time and attendance system, you can see a map off all the pings throughout the day for an employee. Many businesses use this feature for payroll accuracy, dispatching or job site efficiency, and employee security and accountability."

Q. How do time and attendance systems integrate with payroll systems?

A. Time and attendance systems integrate with payroll systems by allowing you to seamlessly transfer your time and attendance data into your payroll program with just the punch of a button.

"Integrating a time and attendance solution with your payroll solution increases accuracy and efficiency for both administrators and employees," Klamm said.

She said the common benefits of this integration are that it avoids dual entry of data, minimizes the day-to-day upkeep of data, decreases the likelihood of a misconnect or error, and streamlines the data management process.

Rissell said finding a time and attendance system that easily integrates with your payroll solution is crucial.

"With payroll being the single largest line item on most businesses' P&L statement, making sure it's accurate is equally important to the employer as it is to the employee," he said.

Q. How do time and attendance systems manage paid time off?

A. Time and attendance systems manage PTO in several ways. The first is that they can track how much time off employees have earned and used.

"More advanced systems are capable of accruals, including paid sick leave accruals, which are based on hours worked rather than the passage of time," Klamm said.

Some time and attendance systems can also handle the request and approval process. This allows employees to ask for time off directly within the system and managers to either approve or deny those requests.

"More sophisticated systems can manage the variety of time-off policies that different employers have in place," Klamm said. "For example, allowing employees to go negative with their balances or the ability to forecast their balance for a requested future date."

Q. Will time and attendance systems help businesses that may have to abide by the proposed federal overtime laws?

A. Even though the proposed federal overtime law is being appealed and on hold, many employers have already started taking steps to make sure they are complying if the appeal is denied. One way they are doing so is by implementing time and attendance systems.

Since these systems offer an easy and efficient way to track the exact hours employees work and any overtime pay they may be due, a number of employers are seeing the benefit of time and attendance solutions. By installing these systems now, even though the law is under appeal, businesses can at least start to plan for what the proposed overtime law will mean for their payroll costs.

If you think a time and attendance system is right for you, we encourage you to check out our best picks for various types of business, our reasoning for picking each, and our comprehensive list of time and attendance systems.

Editor's Note: Looking for information on time and attendance systems? Use the questionnaire below, and our vendor partners will contact you to provide you with the information you need: 

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