As a small business owner, are you a real stickler for timekeeping accuracy or a little lax on the process, especially for your full-time exempt employees?
If you are lazy about enforcing timekeeping, you’re opening yourself up to financial hardship and a huge headache with a whole lot of hard work to get your self out of a pickle. Off-site HR pros at a Professional Employer Organization (PEO) can help to set up and enforce timekeeping policies that take the burden off you, the business owner while ensuring accurate record keeping.
Below, we outline some of the most common areas where businesses are lazy when it comes to timekeeping and what it really costs your company.
Whether you use a paper system, a punch card, or an online time clock, when you have humans entering data, it is perfectly normal that errors will crop up, it’s simply in our nature to make mistakes. And while it’s par for the course, the issue with these errors is that as a business owner, you’re supposed to be the one that identifies – and corrects – these inconsistencies before payroll is cut and certainly before it’s reported to the federal government.
Does your employee clock in the moment they reach their desk, but then spend the next 15 minutes grabbing coffee, putting their lunch away, and catching up with co-workers? Then, does the same thing happen at the end of the day? While it may feel like only a few minutes for this one worker, in actuality it amounts to an hour and 15 minutes of “extra” time on the clock each week – and a whopping 65 hours a year – where no actual work is done. That’s a pretty dramatic number for one employee, but what if most of the folks in your company are doing it? As you can see, it all adds up quickly and can really make an impact on your company’s largest expense: salaries.
Not Being Able to See the Big Picture
When folks make errors on their punch card or are lax in recording their time worked, and it goes unnoticed, chances are you aren’t getting an accurate picture of what’s going on in your business. Is one team always clocking in early and leaving late? Are they working on weekends and not recording it?
For this team, it might be time to reevaluate their workload or consider adding to their ranks to balance the workload and foster their engagement, as well as ensuring that you don’t pay the consequences of them not recording their time with fines or even jail time.
If you have a team – or even just a few individuals – who clock in late and leave early, perhaps they can handle more of the workload. Again, if you don’t have an accurate picture of how much your workers are actually working, you can’t accurately make decisions about how to allocate resources and help your company to work most effectively.
The HR experts at a PEO can monitor the employee hours and pick up on patterns such as these.
Not Knowing Who’s Owed What
If your workers accrue time based on how many hours they spend on the job, you’ll want to pay close attention to what they are logging and how those hours are stacking up so that you aren’t being taken advantage of or duping people out of promised time off.
It should also be noted that having a system where you can see what they’ve earned – and preferably, they can see it too – can really streamline the time-off request process so that you aren’t spending the bulk of your days trying to figure out who’s owed three days at the last week of the year. Your employees work hard to earn that paid time off and encouraging them to use it in a timely manner helps you balance all of the time off requests, instead of having a rush at the end of the year and no one in the office.
Being able to see this with just a few strokes of the keyboard with an information management system customized to fit the timekeeping needs of your organization can mean big time savings for you and reduced frustration for employees, meaning that you have more time to focus on what matters most in your business.
Errors Add Hours
If you have errors or omissions in your payroll, it’s up to someone to lead the charge to get it figured out. In most cases, that person will have to speak with the employee in question to figure out what happened, reiterate this to the folks who are in charge of payroll, relay this information back to the employee, and follow up across the whole process to make sure that things are fixed in a timely and complete fashion.
In short, it’s a huge time investment for at least one person – and often multiple employees – to get any discrepancies ironed out, which in turn means that people are being pulled away from their regular job tasks and therefore costing your company in terms of lost productivity.
The timekeeping experts at a PEO can assist in ironing out any discrepancies.
Keeping It Compliant
One of the most costly issues with timekeeping errors is that it opens your business up to compliance claims. For example, an employee can sue you for unpaid wages if you implemented an error – whether you thought you were ‘fixing’ it or needed to otherwise reduce their hours – and the lawsuits surrounding that is ridiculously expensive and requires a ton of legwork on your part to prove your innocence. The tricky thing is that if your timekeeping is riddled with errors – or you simply aren’t up to par with your record keeping – you make your company vulnerable to litigation and fines.
Working with off-site human resources professionals with timekeeping expertise to ensure compliance paves the way for you to deal with what matters most long-term strategic planning and focusing on client delight. A PEO adds an extra layer of protection, keeping an eye on your timekeeping system on a regular basis to identify missing data, inconsistencies, glitches or other issues that require your attention and alerting you to the issue so that you can resolve it before it gets out of control.