The APA (American Payroll Association) estimates that enterprises that manually track their time and attendance spend an extra 3% to 5% in payroll costs. Additionally, employee buddy punching accounts for untold millions in annual lost revenue. Besides eliminating transposition errors associated with manual time and attendance tracking, automation offers enterprises centralized capture of data, which can be quickly turned around in the form of useful reports, such as employee attendance and employee efficiency. These statistics should make enterprises want to look into automating their time and attendance process. But, why do many not heed this advice?
According to Martin Huddart, general manager of Recognition Systems, a division of Ingersoll-Rand (Woodcliff Lake, NJ), lack of education is the reason many enterprises resist automating their time and attendance tracking. "Many companies don't understand ROI on time and attendance systems," says Huddart. "They think 'this solution is not essential for doing business so why should I waste my time looking into it?'"
Excuse Time - Barriers To Automation
Even after companies do realize the potential long-term savings of automating their time and attendance, they often run into a second barrier: their employees. "Those who oppose it are typically the ones that are abusing the manual system," says Peter DiMaria, president of Accu-Time Systems (Ellington, CT). "Also, studies show that many honest employees who know time stealing is occurring do not want to 'squeal' on coworkers. When the automated system goes in they quietly rejoice that management can now curb fraudulent behavior."
A third common barrier to automated time and attendance adoption is in the biometrics arena. Some employees, for religious or ethical reasons, feel uncomfortable with their employer capturing such personal information as a fingerprint or their hand geometry. But, like many fears, proper education seems to be the best Rx. "Biometrics devices used for time and attendance automation do not capture information the same way the FBI does," says Jimmy Bianco, president of Control Module Inc. (Enfield, CT). "These devices use a capacitive technology to measure the ridges and valleys between the fingerprint lines or to determine the volume of the hand by capturing between 5 and 35 points of interest. When the FBI takes a fingerprint, on the other hand, they are capturing an exact image of the print which is much more complex and personal."
Four Ways To Track Time
After companies realize the benefits of automating their time and attendance tracking, they must determine the appropriate modus operandi for capturing data. There are four main tracking methods to consider, each with its own pluses and minuses.
1. Token - This has become one of the most widely used methods for capturing time and attendance data. The token typically looks and works like a credit card and uses one of three kinds of technology to interact with the time clock: magnetic stripe, bar code label, or RF (radio frequency) chip - known as proximity card.
Of the three types of tokens, magnetic stripe and bar code label badges are used the most. "Bar code label badges are good for environments that entail frequent handling," says DiMaria. "Because they rely on optical technology they can be used for a very long time before needing to be replaced." These tokens may best be used in environments such as manufacturing where employees not only use the badges to clock in and out but also use them at their workstations to log on to their machine. In this scenario the employer not only tracks time and attendance but also can accurately track employee production as well. "Magnetic stripe badges are an alternative to bar code label badges and offer the added benefit of being able to contain more data on the badge," says DiMaria. While the technology used by these tokens offers a high "first read" rate and these badges are less expensive than the other two, they do have significant drawbacks. Magnetic stripe badges can become easily damaged by scratches on the magnetic stripe or by coming in close proximity to a magnetic field.
The third type of token is the proximity badge. Proximity badges contain an RF chip that emits a signal that is read by an RF reader. The benefit of this solution is that it offers the quickest read rate compared to the other automated time tracking options. The drawbacks of proximity badges are that they cost five times as much as the other types of tokens and they don't offer much higher security. "All token-based systems are susceptible to fraudulent use," says Huddart. "They only identify the token, not the individual using it. Additionally, they require a badge to be issued, which can get lost, broken, or stolen and would need to be replaced."
2. Browser - This method of time and attendance tracking entails employees signing in at a computer, which could either be their PC or a computer at a designated workstation. The benefit of this method is that employers can easily send data to a central location and they don't have to invest in token reading or biometrics reading clocks which can sometimes cost $2,500 each. The downside to using a PC to track employee time and attendance is that there is no way to effectively curtail buddy punching.
3. Telephony - This method requires employees to call their time in via an automated voice mail system. This is often used by large companies with a high percentage of field employees but not really practical for most companies because of the time required for each employee to call in, enter a password, and hang up.
4. Biometrics - This type of technology requires employees to use their finger, hand, or retina to verify their identity. "The benefit of biometrics devices is that there is no issuing or reissuing of badges," says Huddart. "Also, this is the only method of time and attendance tracking that eliminates buddy punching." Most biometrics devices are equipped with an adjustment for low-to-high security that affects the balance of false "accepts" versus false "rejects." "The decision to favor higher security over lower security can be seen in the nuclear plant versus the retail store analogy," says Bianco. "If the worker at the nuclear lab has to occasionally present his biometric a second time before the device accepts his identity, it doesn't matter because security is clearly the priority here. At the retail store, on the other hand, a lower read rate is usually acceptable."
When It's Time For A New Attendance System
Enterprises that are considering automating their time and attendance tracking are encouraged to follow what Kronos' VP, Barry Moore, refers to as the three C's: change, control, and cost.
1. "What level of change will an automated solution mean for the organization?" asks Moore. "It should be as easy a transition as possible, which means that it must be easily integrated to your other enterprise applications such as payroll, HR, and ERP."
2. "What kind of control will the automated system give you?" asks Moore. "Is the vendor's system flexible enough to accommodate your diverse workforce? Does the solution put the time and attendance authorization in the right hands?" For example, if accounting or HR mainly controlled the manual system, the automated system can push control down in the chain of command to a shift supervisor if desired.
3. "Know the true cost of your time and attendance solution," says Moore. "The vendor should be able to do an analysis of your company and predict the ROI within six months, eight months, or a year." Additionally, companies should be aware of any hidden costs within a service level agreement. Finding a vendor that offers local service and support, has a proven track record for successful installations, and can install their product with parameter-based modifications are all factors that affect the total cost of the solution. Parameter-based modifications refer to built-in switches within a software solution that the vendor can turn on or turn off to align with the company's payroll rules. This saves having to spend hours of programming to permanently modify a program to fit the company's rules. If a company opts to go with a solution that requires a lot of programming modifications, it can pay significantly more than the out-of-the-box price. Additionally, it will not be able to take advantage of any new releases/upgrades to the software without additional programming modifications.
While there are choices that need
to be made before purchasing or upgrading your time and attendance solution, as long as you avoid the worst mistake you should be okay. The worst mistake that any company can make - even worse than buying the wrong automated solution - is to wait for another time.
Questions about this article? E-mail the author at JayM@corrypub.com.