Today’s companies get pressure from all sides. They face the demands of the market to make everything faster, better, and less expensive. And, technology is constantly speeding up the pace of business, raising the standards for exceptional precision and driving down margins through increased efficiencies.

As a result, businesses must regularly acquire new technologies to keep up with the market and their competitors. The major infrastructure of accelerated supply chains has put pressure on business operations, right down to the individual workers. This is where Time and Labor Management (TLM) comes in as perhaps the last critical frontier of technology-driven business optimization.

To do so, it must solve for a variety of challenges.

Common Time and Labor Challenges

The process of workers clocking in and clocking out is as old as the industry itself. But capturing the time and attributing it to the right individual is the least of a company’s worries.

If different tasks are paid at different rates, that needs to be accounted for. If a company is running multiple shifts, that multiplies the challenges. If that company has multiple departments with different categories of personnel, there’s another complication. And if a company has similar operations at multiple locations – and management needs visibility into all of them – the old time clock is never going to cut it.

Then companies have to consider workplace safety and worker protection regulations. In many cases, federal law governs pay and labor practices. Different states may also have their regulations even when the federal government does not. Here’s a sampling of such laws:

• Pay employees for all “compensable time.” If you know an employee is working on your company’s behalf, you must pay them, even if you didn’t request the work.
• Never assume work is “off the clock.” This includes pre-shift meetings, taking work home, and answering work emails “after hours.”
• Pay terminated employees’ final wages on schedule, as many states require.
• Provide meal and rest breaks or pay for the time they would take.
• Allow lactation breaks for non-exempt employees who are nursing mothers.
• Compensate for travel time as applicable law requires.
• Compensate for on-call/reporting time. If you’re constraining an employee’s freedom, such as requiring them to remain on or close to premises or frequently responding to calls during off-hours, you need to pay them for that time.

Without technology and automation, everything must be done by hand. Not only does this take more time and more hands, it increases the potential for errors. And errors in accounting for compensable time and the pay that goes with it can be fatal to a company’s relationship with the affected employees.

Time and Labor Management Software can solve all of this and more.

What is Time and Labor Management Software?

A complete TLM system consists of three core elements: time tracking and attendance, shift planning and scheduling, and administration of time off. When managed on a digital platform, these can be automatically governed by regulatory compliance factors, company policies, and managerial inputs as needed.

These elements can (and should) then be integrated with the company’s payroll system to eliminate handwork and speed processing while ensuring the greatest possible accuracy. In fact, some TLMs are sold as part of a payroll system package, fully integrated. This can be a good solution for a company that has neither or is ready to change out its old payroll solution entirely.

For those companies that already have a solid payroll system – probably integrated with their accounting platform – or who outsource their payroll operations, a TLM designed for maximum interoperability with different systems is probably a better choice. This allows companies to keep their existing payroll operations intact and simplifies integration with any new payroll platform when the time comes.

You may also consider integration with an analytics engine or even an ERP system to gain data-driven oversight of your business and tightly coordinate every aspect of it for maximum efficiency.

What Does Time and Labor Management Software Do?

The benefits of a TLM system will be obvious to anyone who has to perform, manage, or fund any of the tasks associated with time and labor management. The automation and networked capabilities of a TLM cut costs at every step. These include:

Streamline Payroll Processing

The more complex your payroll run, the greater your savings. Any individual worker can automatically receive the appropriate rate for any given block of time, including overtime, tips, commissions, and bonuses. Even teams of exempt personnel benefit from automatic accrual or application of PTO. No spreadsheets or manual intervention is required.

Manage Employee Productivity

Workers can clock in and out with greater efficiency, and are less likely to miss a punch. Biometric-enabled reporting with technologies like facial recognition and fingerprint scanners ensures accuracy as well as ease of use. This is especially useful for organizations with remote or distributed workforces. Mobile and geofencing capabilities extend this convenience and precision to the field.

Improve Employee Satisfaction and Retention

Despite concerns about privacy and employers’ intrusion, a majority (53%) of workers are comfortable with more robust electronic location- and time-tracking if it assures their pay will be accurate. At the same time, inaccurate paychecks – and the hassle of sorting them out – is a sure way to motivate staff to look for a new job.

Ensure Compliance and Risk Management

Perhaps the greatest savings is one of the least obvious. Because a TLM can be automatically governed by pre-programmed regulatory guidelines and company policies, neither employees nor managers nor administrators need to spend time tracking or adjusting for those factors. Alerts can flag overtime. Contractors and part-time employees are much less likely to be misclassified. All time is accounted for, and a clear record is automatically generated to document a company’s compliance in the event of an audit.

Unfortunately, time theft remains an ongoing challenge for employers. Tactics like buddy punching or time falsification can represent real threats to the bottom line. However, the time and attendance tracking capabilities of a TLM can greatly mitigate the issue with minimal manager involvement.  

Enable Workforce Flexibility

All this gives management at every level the ability to adjust staff levels, locations, and schedules as needed. A TLM’s scheduling capabilities empower sophisticated planning – factoring in pay rates and mandatory times-off – to maximize cost-effective staffing with assured compliance. These schedule changes can then be instantly communicated to everyone affected, so the whole team is always on the same page.  

Increase Overall Cost-Efficiency

In the same way, ERP systems have eliminated much of the operational friction in industry, a TLM eliminates hundreds or even thousands of tiny steps in time-tracking and cost accounting for labor. What’s more, the data and insights a TLM system provides can help executive management identify even more ways to trim costs without adversely impacting quality or company culture.

Invest in Efficiency: The Future of Your Business with TLM

While point solutions have long existed for time-tracking, TLM goes many steps further. In addition to recording staff time on the job in a variety of ways, TLM can apply different pay rates to that time, enable managers to easily design and distribute work schedules, accommodate breaks during the day and time off during the year, and feed all that information into both the company’s payroll system and into analytical systems to help guide executive management’s strategic decision-making.

More sophisticated TLM systems enable even more benefits. Some allow managerial oversight from a mobile device, letting them monitor and address shortfalls in staffing from anywhere. Some allow employees to swap shifts without putting management in the middle while still enabling remote approval. Not only do features like these save time, but they give the entire company the ability to take initiative and drive the business forward.  

This can power a business’s ability to move faster, deliver higher quality products and services to its customers, and control costs. What’s more, the right system can increase employee satisfaction along with productivity, and manage labor costs in the process.

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