At this point, your task force has defined your manual time and attendance process, has identified problems and opportunities, and is working to ensure the uniform enforcement of your payroll policies. You’ve probably also uncovered some areas for cost savings.
The next step is to develop goals or criteria for your automated system. These goals will guide your choice of products, services, and vendors. You will evaluate vendors’ proposals based on their ability to help you meet your goals. Goals might be stated in terms of system capabilities and features or in terms of benefits your company expects to derive from the new system. Here are some typical goals that may be relevant to your organization.
Corporate Time and Attendance Goals
• Decrease overall labor costs
• Shrink the gap between payroll policy and actual practice
• Comply with government and/or union regulations
• Reduce administrative overhead by eliminating time spent on manual timecard calculations
• Find a solution that can expand as the business grows
• Solve anticipated downstream challenges, such as absence management or scheduling Technology goals
• Leverage the company’s existing IT investment
• Interface with payroll program (or service bureau) as well as other systems such as HR or ERP
• Provide audit trails
• Produce timely and accurate management reports by employee, department, and pay-rate class for all pay periods
• Improve data security
• Be easy to install and maintain with current staff
Automated Process Goals
• Reduce time spent on overall process
• Eliminate redundant data entry
• Apply complex pay rules consistently and accurately across all functional departments
• Accurately record, collect, and report time and rates for standard and incentive pay-rate classes, shift differentials, and productive and nonproductive time
• Provide an effective means of distributing reports for departmental review and editing Other goals
• Enable the organization to shift responsibility for managing labor costs from payroll to department managers
• Gain universal acceptance of the solution by making it easy
In addition to specific automation goals, you will have many requirements related to the vendor. For example, you may require that the vendor have a local presence or be experienced in your industry.
Identifying the potential for savings
To evaluate the project financially and prioritize it against other projects your company wants to invest in, the task force should determine the potential for savings. Most of our customers find that automating time and attendance brings a very fast return. The key areas of savings are listed below. Where can savings come from?
• Reducing payroll errors
• Reducing total payroll processing time
• Reducing unauthorized leave time
• Eliminating unplanned overtime and nonproductive hours
• Reducing payroll inflation
• Improving labor reporting
Why do companies automate their Time and Attendance?
Our research shows that companies are initially motivated to automate their time and attendance processes not for the potential cost savings, but because of frustrations with their manual systems. These frustrations are impossible to quantify, but at the top of the list are a lack of accurate, timely reports and a lack of data integration with payroll and other systems. Companies also mention that they face increasing complexity due to a growing employee population and other business changes.
When you evaluate time and attendance solutions, remember that the least expensive system will not be the best system for you if it fails to meet your business needs. You need a solution that can easily and cost effectively be adapted to address changes in your business. It’s important to look down the road. Many organizations automate but soon realize that the vendor’s solution has major feature limitations, does not integrate well with other systems, or requires additional customization as business changes — all of which increase the total cost of owning the solution. The moral of the story: Try to anticipate your future business needs.