Time Clocking Today: Time is Money

Over many years we have seen that many business owners and managers are unaware of the benefits of automated time clocking systems. 

Others are often put off by the perceived cost which, as you will discover, is actually far less than a manual attendance management system. 

This article will cover everything you need to know to make an informed decision. By the end, we’re confident that you’ll be better equipped to choose the right solution for your company or organisation.

Time Clocking Systems – An HR Necessity 

For most businesses, labour is the single largest expense category. Deloitte has shown that employee wages, benefits and payroll can account for up to 70% of operational costs. Yet, according to this survey HR professionals only spend 15% of their time managing labour costs.

Businesses rely on their workforce to produce items and to serve their customers. Projects are planned and budgets calculated, often on an hourly basis. 

An engine cannot run if it’s waiting for it’s piston to arrive. Each part must be in good condition and functioning in harmony and at the same time as the whole. A company or organisation is no different.

Accurate time and attendance tracking allows for better labour planning, which results in improved operational costs and workplace efficiency. 

What are your Payroll Costs?

To effectively manage operational costs companies need to have a baseline from which to monitor trends. This platform is used to make decisions, without it businesses are flying blind.

Some examples of useful questions we can ask are:

• Are we managing overtime properly?
• How much are we spending on Payroll?
• Which employees or departments are consistently on time?
• Why are our overtime costs so high lately?
• Are we making the most efficient use of our workforce’s time?

How a company gets this data is a very important decision as it can have a direct impact on the bottom line. Paper methods and excel work to a degree but become less reliable are more labour intensive as a company grows.

As you will see from our time clocking cost calculator, even businesses with only a handful of staff (a restaurant for example) can see significant benefits from a dedicated time clocking system.

We will soon look at some available automated clocking options.

But first, it’s important to understand just how much money failing to make the switch from manual clocking could cost you. 

We come across many businesses that are still managing time and attendance the ‘old-fashioned’ way.

We see handwritten timesheets often on multiple sheets of paper.

Sheets that may have travelled from a job site to a supervisor, and then populated into a spreadsheet by someone in the payroll department.

The potential for error and deviations in this type of process is clear.

In our experience, most companies, even those with small staff compliments, are negatively impacted by manual clocking processes.

Some factors contributing to this are:

• Lost timesheets
• Illegible handwriting
• Incomplete entries
• Falsifying entries (particularly overtime)
• Buddy clocking

And the list could go on.

The takeaway here is that manual systems open a company up not only to error but also to disputes. If ever faced with an employee overtime lawsuit this method leaves an audit trail that is far less than ideal.

The good news is that there are better and more cost-effective way thanks to the advances in automated time clocking technology.

And as you will see by populating the appropriate fields in our *Time and Attendance calculator, the ROI from these systems can potentially be realised from the very first month.

*(The values below are not a promise but merely an indication of the potential costs saved by reducing fraud and human error. Overtime and overtime fraud have not been included but could significantly increase the savings in some cases. Savings will also vary depending on the time clocking system and software packages chosen. We explore the costs of different systems to help your decision making later in this article).

1. Time cards are a step closer to a better system but with some caveats. Employees are issued cards which they swipe to start and end their shift. The data is automatically transferred to create digital timesheets, eliminating paperwork. However, cards can and do get lost and it’s easy for co-workers to swipe a colleagues card to clock them in or out of work when they’re not there.

2. Proximity clocking uses key fobs, cards and badges that only need to pass the front of a reader to be read. This is a slightly more high-tech system than time cards but with many of the same problems of losses and buddy clocking. In some situations, Radio-Frequency Identification (RFID) might be used to track employee movement within or outside of a facility. 

4. Web-based Digital systems are typically cloud based and great for freelancers and small teams.  They’re brilliant at allowing managers and users to track time and gain valuable insights into where time is being spent. In some cases, employees can be tracked via GPS and logged in automatically even remotely. However, these systems assume users are working from laptops or have charged smartphones which may not be applicable to every case. These systems also typically have a per-user monthly cost to use the software. 

5. Interactive voice recognition systems (IVR) are useful for companies that don’t want to install time clock terminals. These systems use voice recognition technology – employees call in by phone and the software does the rest. This can be an excellent solution for remote teams assuming that employees are where they say they are.

3. Biometric systems use biometrics to log employee time and calculate attendance. The major advantage is that they are almost impossible to cheat which eliminates buddy clocking. It is important, however, to choose a reputable brand – problems can arise if the terminals are low quality or not sensitive enough. If it takes an employee a few minutes to clock in, multiplied by X employees then the system begins work against itself. 

Time Clocking Comparisons

The table below is a rough visual representation of the points above. 

Our Winner: Biometrics

Every business and situation is different. So, naturally, there cannot be a definitive best solution.

For certain situations, Web-Based applications may be optimal and of course, there are cases where setting up a biometric attendance system might not be feasible nor desirable.

However, for the majority of companies and organisations, a good quality Biometric terminal coupled with a robust yet easy-to-use software solution is the way to go.

Keep in mind that this article only a guide. The system you choose will largely depend on the goals of your company. If you would like some help with making that decision, get in touch with us here.

What we would like to state, though, is that if the goal is to save money and time then you’ll be hard-pressed to find a better solution than biometrics.

Fingerprint Scanners

From accessing your cell phone to clocking in for work or getting money from an ATM, biometric fingerprint scanners are becoming increasingly common.

The technology uses this uniqueness of our fingerprints to store individual prints in a database which it later accesses when a user places their finger on the scanner.

There are two main ways to scan a fingerprint.

An optical scanner works by shining a bright light over the print and taking what could be likened to a digital photograph. This high-resolution digital image is produced by a light-sensitive microchip which is then analysed and pattern-matched by sophisticated software turning it into usable code.

Capacitive scanners model the valleys and ridges that make up the fingerprint, but instead of using light, the capacitors use electric current.

Capacitive scanners are much harder to crack as they require a real fingerprint-type shape, rather than a pattern of light and dark.

Their use of a semiconductor chip also allows them to be more compact than optical devices but are generally more expensive than their optical counterparts. 

Capacitive scanners are recommended for high-security applications due to their spoofing resistance. 

While optical sensor solutions are a great low-cost solution for low-security access control and time clocking applications. 

Facial Recognition

Facial recognition is a relatively new technology which, like fingerprint scanners, uses biometric scanning technology to identify individuals.

Only this time, instead of using someone’s finger, the technology is able to map and store our unique facial features in a database and recall it when needed to identify who we are.

Face recognition in mobile applications uses three types of 3D sensing techniques: Time-of-flight sensing (infrared), Stereo Imaging (stereo infrared), and Structured light (depth maps) which is covered in more detail here.

Time and attendance systems typically use optical scanners which turn the data points into usable code (see infographic by Panda Security below). 

However, this is by no means the only technology available – the race is still on.

Companies like ZKTeco continue to develop and improve their biometric technology.

For example they have developed Enhanced Visible Light facial recognition which uses deep learning. On their website it states:

Facial Recognition has been considered as one of the rising biometric technologies and many are optimistic about its development in the future.

 

However, the technological incapability of facial recognition has also been exposed along with the increasing usage in our daily life, mainly in the ability of anti-spoofing, a threshold of processing power, environmental restriction on the light source and pose of angle.

 

Therefore, this is precisely what the Enhanced Visible Light Facial Recognition was developed for and the key to this breakthrough would be incorporating Deep Learning technology. 

The Best Time Clocking Solution?

Of course, there is no right or best solution as every situation is different. However, investing in automated time and attendance solutions can be a very good business decision.

It’s often more important to choose a good manufacturer than the type of authentication i.e. fingerprint or facial.

However, a very important consideration which we haven’t covered here is the software. Some concerns around Biometric technology, have been raised particularly around privacy and identity theft.

Companies should be especially careful when using their party service providers as leaked biometric data (or worse yet sold data) could lead to severe repercussions.

CDCSYS Time Clocking Software

At CDC Business Systems we have developed our own time and attendance software that pairs perfectly with ZKTeco hardware (our recommended manufacturer).

There are two major advantages to using our software: we only charge a once-off licence fee (no monthly subscription) and the data is not is kept by you locally – increasing the security of this sensitive data.

For more information on our software or to browse our available products please visit our Biometric Systems page where you can also contact us via the webform.

We’ll help you choose the time clocking solution that is right for your situation.