In this age of knowledge work, businesses are focusing less on keeping track of employee hours.
Especially for businesses that consist largely of salaried employees, meticulous employee hour tracking is often a thing of the past.
However, quite a few businesses still need a way to manage employee hour tracking. Businesses with hourly employees, for example, need to track employee hours for accurate payroll numbers. And for businesses that bill by client or project, sometimes hours worked must be tracked to the minute.
And even for employees who aren't held to strict clock-in and -out times, keeping track of how their time is spent at work can still be useful. By knowing how many hours they spend on certain tasks, employees can make smarter, more efficient decisions about how they use their time.
Whether you need to track time spent on a job site or shift or want to measure how your knowledge workers spend their time online, multiple methods are available for tracking employee time. Read on to find out the best way to keep track of employee hours for your business.
At a glance: How you can track employee hours worked
- Pen and paper
- Desktop or kiosk time clocks
- Mobile apps
- Geofencing and GPS tracking
- Biometric clock-in
- Browser plug-ins and URL tracking
Should I be tracking employee hours?
For businesses with hourly employees, tracking employee hours is a must.
If you don’t, there's no way to know how much you should pay your employees for their time worked. However, even businesses with salaried employees can find tracking employee time useful.
Knowing how employees, salaried or hourly, spend their time can help you make better staffing and scheduling decisions, track labor costs more accurately, and increase employee productivity. But it also offers a few other practical benefits, which I'll discuss below.
Generate accurate payroll numbers
For businesses with hourly employees, tracking employee time helps you calculate payroll correctly. Tools like time clock software can track employee time down to the minute. Tracking time this way ensures that your employees get paid for the work they did and that you're paying out the correct amount for each pay period.
Ensure that you're adhering to labor laws and time off policies
By tracking employee time — whether through pen and paper or software — you have a record of when and how long your employees worked. Using these numbers, you can make sure that your employees are working their allowed number of hours, that they're compensated correctly for overtime, or that they're taking time off if or when they need it.
Have a better understanding of where employee time goes
By knowing when and how long your employees have worked, you'll better understand your labor needs. Restaurant owners, for example, can compare sales numbers to labor costs during any given shift. These comparisons can help them understand when they might be over- or under-scheduling their teams.
Or if your business needs to track time by project or client, you can see how labor costs and employee hours stack up against your revenue numbers. Seeing which clients or which types of projects are more profitable, or are more of a time-suck, will help you make better business decisions in the long run.
How to keep track of employee hours
If you're ready to experience the benefits of tracking employee hours, take a look at several of these time tracking methods so you can choose the one that's best for your business.
1. Pen and paper
If you're old school or working somewhere with poor internet connectivity or patchy access to technology, you can use good old-fashioned pen and paper to start tracking employee hours.
Have employees record the date of their shifts and their start and stop times, and you're good to go.
This analog tool might not be every business's preferred method of clocking in and out, but it's a no-fuss solution that requires little employee training.
Pro tip: Even if employees record time on pen and paper, put their hours into a spreadsheet tool like Excel or Google Sheets. Excel time tracking will help you calculate hours worked and export numbers to your payroll solution so you don't have to do it manually.
2. Desktop or kiosk time clocks
Using such an app, you can set up a designated clock-in station where employees can record their time. By designating specific places for employees to log their time, you can create a streamlined process for tracking employee hours.
Setting up this type of time clock is typically as easy as downloading an application and assigning employees ID numbers or PINs to allow them to clock in or out. These systems also typically allow you to export employee time data to your payroll solution so that paying employees is seamless.
Pro tip: Setting up a desktop or kiosk as a time clock station requires hardware. Make sure you factor the cost of a desktop, tablet, or kiosk into your budget when considering this type of time clock.
3. Mobile apps
You can use mobile apps to track both clock-in and -out times for hourly employees and to track time by task for salaried or contract employees. A mobile app is another common option offered by most scheduling software.
With a mobile app, employees can access a time clock or timer via their smartphones. If your employees have set shift hours, the app can prompt them to clock in and out or even to take a break during their shift.
If your employees track time worked by project or client, they can track hours worked and assign it to the appropriate revenue stream on their mobile device.
Pro tip: Before choosing a mobile app as your main method of tracking employee hours, be sure all your employees have access to a smartphone. If they don't, establish a backup method that these employees can use to log their time.
4. Geofencing and GPS tracking
A simple mobile app might be enough for your mobile employees or those who travel between different job sites. However, if you need greater accuracy, you may choose GPS tracking or geofencing.
With GPS tracking, you can set up a geofence around any of your job sites. When an employee arrives on the site, their mobile time clock app will send them a notification to clock in. And if they leave the job site, they'll be prompted to clock out.
You can also use GPS tracking to see where your employees are during the day and verify their time on-site and en route.
Pro tip: As with a mobile app, you need to make sure your employees have access to some type of mobile device to use GPS tracking or geofencing effectively. And although many time clock tools offer GPS-based clock-in as an option, it's typically only available if you purchase an upgraded version of the software. Weigh the costs and benefits of this type of tool before settling on it as your best time tracking option.
5. Biometric clock-in
Biometric identification uses biological features such as fingerprints or facial features to verify a person’s identity. Using biometrics to allow employees to clock in helps prevent buddy punching, where one employee clocks in for another. Once an employee clocks in using a biometric feature, your time clock system will track their hours until they clock out.
Pro tip: Biometric identification is still a pretty new feature in the time clock software market, so not all tools will offer it as a clock-in option. Furthermore, using biometrics requires purchasing other equipment, such as fingerprint scanners. So unless you really need to verify the identity of your employees, biometrics might be too costly as an option for tracking employee hours.
6. Browser plug-ins and URL tracking
If your employees largely work on computers and you'd like a better idea of how they use their time, you can use a time clock tool that tracks employee URLs or offers a timer as a browser plug-in.
Timers are especially useful if your employees need to log time spent by project or client. With the touch of a button, employees can start and stop a timer to record what they're working on and send the hours to their timesheets in real time.
To verify how your employees spend their time, you can also allow a time clock tool to track the URLs they visit. This will break down time spent on work tools versus personal sites like Facebook. When you know how employees spend their time, you can better identify ways they can work more efficiently.
Pro tip: If you're tracking URLs — or even taking screenshots of employee screens during work hours — you should let employees know that their activities are being tracked. Many tools that track this type of information also offer the option to send time reports to your employees. Sharing these reports with them will help them independently make smarter decisions about how they use their work time.
Should I use a time clock to track employee hours?
Aside from using pen and paper, along with a tool like Excel, to track employee hours, most of these tools are available through some type of time clock software. While more analog methods are effective in keeping track of employee hours, time clocks are more accurate and involve much less upkeep on your part.
These tools often integrate with or allow exports to payroll tools, and you can be sure that your employees get paid on time for the hours they log. And speaking of money, investing in time clock software has financial benefits for you.
With accurate employee hours logged in real-time, you can get better, smarter insights into labor costs and employee efficiency. These insights will allow you to make cost-effective scheduling decisions that could reduce cost over time.
Start tracking employee hours
Ultimately, you should use the type of tool that works best for you and your employees. Regardless of the tool you choose, tracking employee hours will give you useful labor cost and productivity data.
If you're interested in time clock software that offers some of the hour tracking tools I discussed above, here's a list of some top-rated systems:
- Homebase offers a mobile or desktop time clock app and GPS-based clock-in.
- TimeCamp allows you to track employee computer usage and offers an online timer for employees to log time by project or client.
- Replicon is a heavy-duty time clock and scheduling system that offers biometric clock-in options, such as Face ID, in addition to mobile apps and GPS-based time clock tools.
The Motley Fool has a Disclosure Policy. The Author and/or The Motley Fool may have an interest in companies mentioned.