In most cases, employee wages are among the greatest expenses an employer faces each month. It makes good business sense then to consider how to minimize this expense, but employers are often unaware or perhaps feel too busy to even begin the discussion. Enter… automated timekeeping.
The good news for employers is that labor and payroll expenses can be reduced. In fact, there are many opportunities to gain control and cut costs without sacrificing production or value with a few essential tools. Automated timekeeping is perhaps the most important. Whether it’s eliminating hours of overpaid wages and unnecessary manual administration, employers can… and should… take steps to minimize their payroll costs.
Here are just 4 ways automated timekeeping reduces your labor expenses.
1. Eliminate Punch Rounding & Approximating - Doesn’t it make perfect sense to pay employees for their actual time worked… not a rounded best guess? When employees round or approximate their punch times, they round in their favor and employers end up overpaying for labor… by a lot!
The average employee records 4 punches per day including lunch punches. If they are rounding to the typical nearest 15 minute increment, then employees can round in their favor by as much as 7 minutes per punch. Do you know what 15-28 minutes per employee per day is costing you? In most cases, it's a shocking number. Don’t let this outdated practice cost you. The fix is simple. Pay employees to the minute with ease using automated timekeeping.
2. Put an End to Costly “Buddy Punching” & Time Theft - “I’m running late. Can you just clock me in?” Sound familiar? It happens all the time… and it costs employers dearly.
The American Payroll Association estimates that over 75% of employers experience loss associated with “buddy punching” both in wages and productivity. Other forms of time fraud and theft are rampant in companies that don’t offer an automated solution for employees, managers and payroll staff. If your process allows for this to occur, you have no one else to blame. Your staff is simply too busy to catch, chase or investigate each occurrence.
The fix is really quite simple. It’s automated timekeeping with biometrics. Today, an inexpensive plug-and-play biometric time clock can be easily set up to verify an employee at the clock. Do yourself and your frustrated staff a favor by curing time theft and buddy punching.
3. Minimize Payroll Mistakes & Human Error - Human error can be an immense expense for employers. The APA estimated human error in time card preparation to be between 1% and 8%. With a $500,000 annual payroll, even a 2% error rate represents $10,000 in erroneous wages.
Fixing mistakes also has its costs with administrative time, reprocessing fees, re-issuing checks and so forth, in addition to the frustration caused for all parties involved. Automate your tracking and time card preparation. Your payroll staff will love you for it.
4. Minimize Overtime Costs - Getting the job done for your clients is top priority, but are you managing and minimizing your overtime exposure?
With automated timekeeping and scheduling, perhaps it's something as simple as avoiding an extra 15 to 60 minutes of overtime per week, per employee, resulting from punch approximations. Why not track hours to the minute? If you’re not using an automated timekeeping solution, more than likely, you’re paying employees thousands in unnecessary overtime wages at time-and-a-half pay.
In conclusion, automated timekeeping is a small but tremendous investment for employers! Believe it or not, there are many more ways to save! Start putting more of your hard-earned revenue back in the bank with automated timekeeping.