Are spiraling labor costs having a negative impact on your company’s bottom line?
Employee costs are one of the biggest expenses incurred by any business. If you’re still relying on a manual timekeeping system or an outdated punch clock to help you manage your payroll, your labor expenses are likely to be much higher than they should be. One could make the argument that if you’re not using some sort of time and attendance software as part of your labor cost management program, you really don’t have any type of cost management system in place at all.
The Costs Associated with an Outdated Timekeeping System
Did you know that a payroll clerk spends an average of seven minutes handling and processing each employee time card? For a small business with 50 employees who are paid an average of $15.00 per hour, this results in a cost of $87.53 per pay period for time card preparation alone. Time theft, which can occur in the form of extended lunches and breaks and the practice of “buddy punching” (employees punching their friends in or out when they’re not there) is another common problem associated with an outdated payroll system. And even the most efficient payroll clerks are prone to making errors that can add to your labor costs
Labor Management Software Can Provide a Cost-Effective Alternative
Using reliable time and attendance software can significantly reduce your labor costs by helping to cut down on wasted time and minimizing human error. Let’s use buddy punching as an example. In a typical buddy punching scenario, an employee realizes he’ll be 10-15 minutes late for his shift and calls a friend to ask him to punch the time clock for him so he won’t lose any time. On the surface, this doesn’t seem to be that big of a deal – until you consider the true costs of this practice to businesses.
According to an American Payroll Association study, buddy punching occurs at 75 percent of businesses, with employees “stealing” about 4.5 hours per week on average. This is the equivalent of about six weeks of vacation. In all, the APA indicates that buddy punching accounts for about 2.2 percent of an organization’s gross payroll.
One-way time and attendance software can help prevent buddy punching is by requiring employee to provide an individual password in order to clock in and out. Although employees can share their password with their friends, many are reluctant to do so as it gives others access to their confidential information.
Contact Orbital Shift today to learn more about the cost-saving benefits of our labor cost management software and to take advantage of our free 14-day trial offer.