Employee Time Tracking
What is time tracking?
Employee time tracking is how organizations record work hours to ensure accurate compensation. It falls under the broader category of time and attendance, with subcategories including attendance, time off, billable hours, and scheduling.
Employee time tracking systems have four main components:
- Time entry
- Timesheet approval
- Payroll
- Reporting
Some organizations still rely on manual time tracking, but dedicated time tracking software can save time and reduce errors
What is time entry?
Time entry is the daily process by which an employer records employees’ starting times, finishing times, and any breaks not included in the employee’s contractual agreement.
Time entry is often called “clocking in and out” or “punching in and out,” phrases that refer to “punching” the button on a physical time clock that stamps the time on a paper timecard. Time tracking systems often use an employee’s first login and end-of-day logout to perform time entry and grant system access.
What are timesheet approvals?
Timesheet approvals are essential for an organization to ensure accuracy and compliance in compensation when tracking employee time. Generally, a manager will review employees’ timesheets for the pay period to verify that they are correct. Then, an HR manager will calculate or use time tracking software for the total hours worked along with any overtime hours.
How does employee time tracking help payroll and reporting?
One of the main purposes of time tracking employees is to provide accurate and approved hours for payroll processing. Time tracking should provide reporting that HR can rely on for payroll calculations so they can process payroll.
By analyzing time-tracking data, organizations can also identify patterns and trends in the following key performance areas:
- Employee productivity
- Project costs
- Resource use
Time tracking reports also have strategic benefits, as they can help an organization perform budget analysis or identify discrepancies in compensation.
For example, are some employees consistently submitting overtime requests? You can use your time-tracking data to identify if you have the right personnel or technology to help employees work efficiently within standard work hours.
What is time tracking software?
Employee time tracking software is a digital tool that uses a unique identifier to clock an employee in and out. It is also often used to track time on specific projects or tasks. Time tracking software can be used by freelancers, teams, and businesses to improve efficiency, accurately bill clients, and gain insights into how time is being used.
Time tracking software will usually include the following features:
- Time entry management: Record and track employee work hours by entering start and end times along with any breaks or intervals.
- Project and task tracking: Allocate employee time to specific projects or tasks, enabling accurate tracking of time spent on different activities.
- Timesheets and reports: Generate timesheets or reports that provide a summary of recorded hours, project progress, and other relevant data.
- Billable hours and invoicing: Generate invoices based on employees’ recorded time, and bill clients accurately.
- Analytics and insights: Get insights into productivity, project profitability, time allocation, and identify areas for improvement.
For example, BambooHR® Time Tracking is a comprehensive solution that helps you simplify and streamline the process of tracking and managing employee work hours. With its user-friendly interface, employees can easily record their time entries, allocate hours to specific projects or tasks, and request time off.
Plus, it easily integrates with payroll systems to ensure seamless and error-free calculation of wages. It’s an efficient way to manage time tracking for both HR and employees.
How to effectively implement employee time tracking
To make tracking employee time successful, mix the right tools with clear communication and supportive leadership. Some key best practices include:
Using effective time tracking software
The right time tracking software allows employees to log their time correctly, while giving employers the data they need. You can identify how time is being spent, with the potential to spot issues before they arise.
Create a clear time-tracking policy for employees to follow
Clearly outline to employees how and when they need to log their time. You should also clarify expectations around breaks, overtime, and remote work. Policies around time management and tracking need to be crystal clear, ensuring consistency across wider teams.
Clarify how time tracking can help your employees and the business
Make it clear to employees why you’re tracking time, noting that it leads to fair pay, better workload management, and improved planning. This can help assure employees they’re not just being monitored, helping them to engage with the process.
Get buy-in from team managers and make sure they lead by example
Managers need to use it, too! Leading by example emphasizes its importance to their teams. If employees see managers using it, the wider team is more likely to get on board.
Have a plan for identifying issues and tackling these when reviewing time-tracking data
Regular data analysis allows you to spot any inconsistencies. It’s useful for seeing overtime trends or missed entries. And lets you address problems quickly, helping to improve accuracy and efficiency.
Provide training and ongoing support
Make sure employees understand how to use the time tracking tools and follow best practices. Offer ongoing guidance to ensure users are best supported.
Integrate time tracking with payroll and project management tools
Connecting systems reduces manual errors and saves time. Having it all in one place helps link hours worked to budgets, project timelines, and employee compensation.