How to save money by automating working time tracking?

Approximately 5-15% of working time is wasted. But knowing who and how wastes precious minutes can reduce losses. Monitoring software can help you to achieve that.

In these hard economic times question of material incentives transforms into a more understandable one: how much to pay someone? To give privileges to more deserving individuals is important from the social responsibility point of view and it is equally as important for business because otherwise the price of human and administrative errors increases. It is dangerous to underpay key professionals because they can leave the company. And, of course, it is inexpedient to overpay employees who are working without a full-time commitment.

The problem of effective wages fund distribution is closely related to several others that go beyond HR management. But before making far-reaching conclusions it is necessary to obtain comprehensive benchmark data.

Most of the working time analysis and tracking systems allow you to assign each employee programs and online resources that he or she should be using for the performance of their work duties (we call them "productive") as well as those programs and websites that distract an employee from his or her work ("unproductive"). The time that an employee spends in different types of programs (and in each of them individually) is calculated automatically. At any time executives can see how much productive and non-productive time was spent by each of their employees in a working day. It is also easy to identify who is late and who walked home early: by recordings of the first and last activity on the computer.

Due to the detailed picture of how working days of each employee go in all departments and the company as a whole it is possible to draw conclusions about who processes and performs someone else’s tasks, who is not busy working, and who sabotages business processes.

Accountants’ tools usually are ones like "FreshBooks" or “QuickBooks” and spreadsheets like Excel. So it is easy to calculate the productive working hours of an accountant. This is the simplest mechanical analysis but even at this stage you can find a lot of interesting things. For example, one company found an employee who spent five or six hours per day (75% of the time) playing online games or watching movies.

Wasted working time usually comprises 5-15% of all working time. Details must be assessed separately in each case because people are not robots and in some cases small breaks are necessary for keeping attention and performance at a certain level. But if only 60% of working time is productive (and we have indeed received such data from our users) then this means that in fact 40% of the wage fund can be considered as direct losses due to employees not performing their tasks.

According to our data, in every third company with a staff of 40 or more people there will be at least one or two employees who are physically present at the workplace but virtually do not perform any useful tasks.

A logistics department might seem exemplary while entering new items in the database without errors and in time. But what if the working time tracking system shows that 70% of database tasks are performed by just one person? You may need to revise guidelines for employees or think about downsizing the department.

If you have purchased 10 licenses of Adobe Photoshop for your advertising department but it is used only on seven computers you will be able save hundreds of dollars on not extending the three excess licenses. Such differences between procurement plans and actually used hardware and software may add up to a surprising number. It is much easier and more logical to optimize the material resources on the basis of productive staff workload and not simple "head count."

Many violations of labor discipline cannot be registered any other way than by automatic tracking. Say, an employee came to the office at 9:00 AM which might seem good as he or she was not late. But if the first computer activity was only at 9:35 AM that means that this employee did not start working immediately.

Downtime should also not be registered selectively. Perhaps in the unfortunate moment of inspection took place when an employee was having a necessary break after finishing a nerve-racking emergency task and before starting a new one. Or, on the contrary, an employee was accidentally caught in a rare moment of doing something productive.

A program keeps track continuously. It provides a reliable numerical estimate without any speculations and assumptions. So, let's say you have a complete picture of the effective use and loss of working time. What's next?

Many companies after a long time of using monitoring system (more than one year) on the basis of total timing of all processes create their own system of time management which includes a system of key performance indicators. Then, based on these standards and the KPI, all the decisions regarding the distribution of tasks, performance assessment, and ultimately decisions on wages fund distribution, recruitment, and rotation or staff reduction are made.

The first result of the automation of working hours tracking in any company is usually approval of allowable percentage of non-productive time. Most managers believe 10% to be the maximum value for this indicator, although some try to reduce time loss to the absolute zero.

"Overtime", days off, holidays, late arrival, and absenteeism of employees can now be reviewed by simply pressing a button: CEOs see the actual employees’ working hours. Paying for idleness is no longer needed.

In addition, some working time tracking systems give employees opportunities for self-tuning. In order to achieve this, a list of typical tasks of each employee is created and any one of them can notify the system of what processes run on their computers. This information is easily imposed on an employee’s computer usage statistics to see if he or she listed the tasks in the system correctly. These summary reports give an idea not only of staff’s workload but also about when, which, and whose actions bring company the greatest profit. This way simple timekeeping of software usage in an office becomes a tool for HR-policy and, when handled attentively, can also help with marketing and financial policies.

After adopting an automated working time tracking system financial losses due to misuse of working hours can on average be reduced by half. In a year it is possible to get additional profit by reducing costs of personnel and office infrastructure (for instance, due to switching some employees to remote work), optimizing taxes and reducing loss of profits.

The payback period of investing in such a system, based on my experience, is about six months. There are two main variables:

1. The price of the system. The cheapest solutions currently are the free systems, like CleverControl Employee Monitoring that allows you to monitor up to 9 employees without any expenses. This is quite enough for a small company or a medium company with a few key players. For companies with more employees there are paid options but still with reasonable pricing, like Spyrix Employee Monitoring and such. The most expensive ones may be up to $90-100 for a user. Even though both cheap and expensive ones have roughly the same features.

2. Methodology of application. If you limit monitoring to simple working time tracking then payback period increases. In the case of complex analysis and multifaceted use of obtained data investment return process can be greatly accelerated and it is more apt to talk about the optimization of business processes rather than about simple savings.

The algorithm of transition from the puzzle of "I wonder, what do my employees do at work" to full information of detailed progress of each individual employee looks like this:

1. Choose a system of working time tracking with flexible enough functionality.

2. Install it, be sure to inform the staff about the new rules of the game (no secret surveillance, it is a direct path to confrontation instead of productivity boost).

3. Stop paying for wasting of working time.

4. Stop paying for absenteeism and lateness.

5. Reduce the software expenses.

6. Exclude unnecessary expenses for superfluous employees.

7. Exclude the cost of performing of simple tasks by "expensive" employees.

8. Establish corporate KPI competitions among departments and employees.

9. Congratulate and reward the winners.