Technology's Impact on Time & Labor

Management

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Throughout history, advancements in technology have changed the way organizations, even entire industries operate. From the invention of the wheel, to the moving assembly line, to cloud-based SaaS platforms, technology has helped shape the evolution of business.

For many organizations, one of the most significant operating costs is its workforce. Despite this, many organizations are not utilizing technology to effectively monitor, track, and analyze key employee data.

In this whitepaper, you will learn how technology is helping to streamline the way businesses leverage time and labor management systems for their workforce. You will also learn how your organization can benefit from utilizing such technology and what to look for when selecting a TLM system.

Introduction

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The term “Big Data,” is used to describe the immense quantity of information that is generated by individuals and organizations throughout the world. To explain it further, Gartner IT1 defines Big Data as “high-volume, high-velocity and high-variety information assets that demand cost-effective, innovative forms of information processing for enhanced insight and decision making.” This data is created on a constant basis and includes everything from information generated by advanced sensors on manufacturing equipment to puppy pictures shared on social media. According to IBM, 2.5 quintillion bytes of data are created every day. That means 90% of the world’s data was created in just the last two years alone.2

This vast amount of data has been significant for many businesses, allowing for streamlined processes and increased efficiency. However, one of the greatest areas of opportunity relating to big data is a department that historically has been an afterthought for business initiatives – Human Resources.

To be successful in a competitive market, businesses need to maximize productivity and service levels while minimizing cost. Human Resources departments can play a significant role in these objectives by accurately tracking and analyzing data related to its most important asset – its employees.

The Big Data Effect

2.5 quintillion bytes of data/day

90%of the world's data

2 yearswas created in the last

1. What Is Big Data? - Gartner IT Glossary - Big Data (Gartner IT Glossary) http://www.gartner.com/it-glossary/big-data2. Bringing big data to the enterprise (IBM) http://www-01.ibm.com/software/data/bigdata/what-is-big-data.html

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Traditional Time and Labor Management (TLM) was performed with manual data entry and paperwork. This made it very difficult to accurately track data, and nearly impossible to understand or anticipate trends. Unfortunately, many companies have not yet adopted the technology to take advantage of this opportunity.

According to research by Bersin and Associates, 56% of organizations are only performing reactive, operational reporting. This type of reporting only provides limited information that is difficult to analyze. The research also indicates that only 4% of companies are utilizing technology that allows them to perform predictive analytics.3 The information available from this type of analysis allows companies to develop planning scenarios, mitigate risk, and align successfully with organizational goals.

So, what’s the big deal about Big Data in TLM? Most HR departments are aware of basic metrics such as staff turnover rates, diversity proportions, and benefit enrollment percentages. But in most cases this information is based on historical performance and provides limited value in the way of improving business performance because of the way in which it’s processed and analyzed.

What if HR departments could use the vast amounts of employee data available to predict future turnover rates - even estimate when turnover will occur? What if they could accurately track and assess the strengths and weaknesses of each employee to create more effective employee development programs? What if they could predict vacancies in skillsets and leadership needs, and develop a plan to develop and retain key staff?

ONLY 4% of companies utilize

technology to perform predictive analytics

3. The Datafication of HR: People Science is Here (The Datafication of HR: People Science is Here) http://www.slideshare.net/jbersin/the-datafication-of-hr-people-science-is-here

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Here are 3 key benefits of using advanced TLM technology to analyze employee data:

1. Identify the strengths and weaknesses of the workforce to create more effective employee development programs and identify leadership needs in case of turnover.

2. Beyond knowing the turnover rate, understanding the causes of turnover helps to develop retention plans.

3. Track absenteeism, tardiness, and misuse of breaks or meal periods to analyze trends and avoid being blindsided by unbudgeted costs and expenses.

Applied properly, HR analytics can show connections, correlations and even causality between HR metrics and other business measures – all of which can be used to inform HR strategy and actions. In other words, by creating a clear ‘line of sight’ between HR activity and your organization’s bottom-line profitability, HR analytics can provide a tangible link between your people strategy and your organization’s performance.

People are the Real Numbers4

KPMG

4.“People are the real numbers: HR analytics has come of age.” KPMG. February 2013. https://www.kpmg.com/NL/nl/IssuesAndInsights/ArticlesPublications/Documents/PDF/Man-agement-Consulting/People-are-the-real-numbers.pdf

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Time & Labor Management On-The Go Mobile Functionality One of the most significant shifts in business technology has been the movement towards mobile functionality. The mobile movement has led to drastic change in many business processes as well as overall change in workplace culture. Time and labor management is an area of business that has benefited significantly from advancements in mobile technology.

Worldwide, organizations employ more than 1.5 billion remote workers. Additionally, Citrix predicts that by 2020, organizations will have reduced physical workspaces by more than 20% due to an increasingly remote workforce.5 As the modern workplace continues to move out of the office and into airports, coffee shops, and home offices, the need for technology to accurately track time and labor is imperative.

The growing mobile workforce isn’t the only reason for needing a mobile functional TLM system, however. Even organizations with entirely office or worksite-based employees are seeing a drastic increase in dependency on mobile devices for work purposes. According to Cisco’s 2014 Mobile Traffic Forecast, there are more than 7 billion mobile devices active across the globe, of which 77 percent are personal smartphones. It is estimated that roughly 80 percent of smartphone users have their phone with them for all but about two hours of the working day.6

Whether an employee is part-time, full-time, or seasonal, they will most likely expect some level of mobile functionality in their work. Mobile-friendly TLM systems are a way to accurately track employee performance and increase engagement at the same time.

5. HOB Trendtalk (: New Infographic: The Power of Mobile Workforce)http://www.hob-trendtalk.com/2013/12/10/new-infographic-the-power-of-mobile-workforce6. Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update 2014–2019 White Paper.http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-in-dex-vni/white_paper_c11-520862.pdf

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Mobile PunchCertain TLM systems, such as Paylocity’s WebTime, allow employees to punch in and out from their mobile devices. This can drastically improve accuracy and reduce fraudulent “buddy punches” by syncing punch data with the employee’s phone – which can be integrated directly with the TLM system.

Mobile punch capabilities also help to reduce cost by eliminating the need for physical time clocks and punch cards.

Geo-Fencing An additional benefit of mobile-punch technology is the ability to set and monitor employees’ punch location requirements. This technology can help drastically cut down on the amount of undue time paid to employees as a result of punching in outside of work, before a shift is scheduled to start. A problem that many employers are very familiar with.

According to research, roughly 69 percent of employees surveyed said they punch in and out earlier or later than scheduled, outside of the office.7 Geo-fencing technology allows managers to set perimeters for where punches can occur. Any punch attempt outside of the set perimeters will be rejected and the manager will be notified of the attempt.

Manager Scheduling & Time-Off ManagementAnother challenge of traditional Time and Labor management processes is keeping track of time-off and scheduling requests. While TLM technology has streamlined much of this challenge, mobile functionality has taken it to another level.

Employees can request time off with the push of a button on their mobile device. Managers are then notified of the request and can approve or deny from their mobile device.

Three Major Benefits of a Mobile-Friendly TLM System

7. Employers Turn to Biometric Technology to Track Attendance (Employers Turn to Biometric Technology to Track Attendance) Sarah Fister Gale. March 5, 2013. http://www.workforce.com/articles/employers-turn-to-biometric-technology-to-track-attendance

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Today, many organizations are using some type of system to help automate their payroll and HR processes. However, many of these companies are still performing time and labor management manually. The result is a time-consuming, costly, and administratively burdensome process.

Companies can streamline this process by implementing advanced TLM technology. Certain systems, such as Paylocity’s WebTime, also integrates with the payroll system so that all payroll and benefit information flows seamlessly. Here are the most significant benefits of TLM automation.

Automation Streamlines TLM From Punch to Paycheck

1. Increased Productivity

Manually tracking and calculating employee time data to process payroll is a very time-consuming process. This is time that could be used more strategically by payroll and human resources professionals.

An automated TLM system eliminates the need for manual tracking and data re-entry and frees these departments up to perform tasks that can have a greater impact on the company’s performance. As an added benefit, the ability to punch in and out, view schedules, and track/request vacation time from a mobile device can have a direct, positive impact on employee engagement and productivity.

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8. 13-2011 Accountants and Auditors (U.S. Bureau of Labor Statistics)http://www.bls.gov/oes/current/oes132011.htm9. Congressional Budget Justifications: Wage and Hour Division Department of Labor. 2013. http://www.dol.gov/dol/budget/2013/PDF/CBJ-2013-V2-09.pdf

3. Enhanced Compliance Security

Accuracy in collecting and processing employee time data is essential to providing correct payroll. Without an automated TLM system to ensure accuracy, organizations are susceptible to lawsuits and requests for back-pay. According to the U.S. Labor Department, $225 million in back wages was collected for employees in 2011.9

Even if payroll errors due to inaccurate time tracking are eliminated completely, the constantly changing tax codes and compliance regulations make time and labor management a challenge. An automated TLM system, such as Paylocity’s WebTime, is constantly updated to ensure payroll and tax data is in full IRS compliance.

2. Impact on the Bottom Line Beyond the loss in productivity due to manually tracking time and labor and processing payroll, there is a significant financial impact. Most companies performing this process manually spend at least 6 hours per week tracking time and attendance information to process payroll. Using the US Labor Statistics average hourly wage of $37.27 for payroll professionals, this equates to $223 per week or more than $11,000 per year.8

TLM technology that integrates with payroll equates to dollars saved!

Additionally, any manual process is prone to error – errors in calculating time and labor equals payroll mistakes and a direct impact on a company’s financial performance. Automating the collection and tracking of punch data immediately improves the accuracy of payroll data and saves money.

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What to Look for When Selecting a TLM System

The benefits of using advanced TLM technology are clear. But how do you decide which TLM system is right for your company? Here are seven key items to look for when selecting a TLM system for your company:

Accessible at all times via the Cloud. No software upgrades or system downtime.

Integrates seamlessly with Payroll system so time and attendance data flows with minimal manual effort.

Accurately tracks all data and provides advanced reporting/analytic capabilities.

Provides mobile functionality for punch in/out, schedule tracking and adjustment, and time-off requests.

Includes geo-fencing capabilities to set and monitor punch locations.

Automates expense reimbursement process and automatically notifies managers when approval is needed.

Tracks performance data to help develop employees and managers.

About PaylocityPaylocity is a provider of cloud-based payroll and human capital management, or HCM, software solutions for medium-sized organizations. With comprehensive and easy-to-use solutions, Paylocity enables its clients to manage their workforces more effectively. Paylocity’s solutions help drive strategic human capital decision-making and improve employee engagement by enhancing the Human Resource, Payroll and Finance capabilities of its clients.

For more information, visit www.paylocity.com.

ConclusionOrganizations throughout the world recognize the importance of automating different business processes to save cost and improve efficiency. Payroll and HR departments are largely following the same trend by automating payroll, benefit enrollment, onboarding, etc. However, one of the most overlooked areas of opportunity in terms of automation relates to most companies’ largest expense – the time and attendance of its workforce.

Technology has had a great impact on improving the efficiency of time and labor management. From mobile functionality to advanced predictive analytics, TLM technology can benefit organizations in many ways. Increased productivity, cost savings, and enhanced compliance and security are indisputable reasons for an organization to implement advanced TLM technology. Doing so will help Payroll and HR departments provide additional value and better align themselves with organizational strategies and goals.