How to accurately track employee hours

Līva Spandega 31.03.2023
An illustration depicting tracking of employee hours.

The decision to track employee hours is crucial for any business, regardless of its size or industry. Accurate time tracking data not only ensures that employees are paid for the hours they work but also helps managers identify inefficient practices and optimize staffing.

However, tracking employee hours can be time-consuming and error-prone if not done correctly. Plus, if you don’t inform your team in a timely and sensitive manner about your decision to track employee hours, you can damage the relationship between you and your workers. At the end of the day, the goal is to increase transparency and trust—so you have to be mindful of how you track employee time.

In this blog post, we’ll look at the benefits of tracking employee hours and talk about how to get your team onboard with the idea of tracking employee time. Whether you’re a small business owner or a manager in a larger company, this guide will provide you with the tools and knowledge to start tracking your employees’ time.

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Why track employee hours?

To track employee hours or not to track? Well, as you’ve probably gathered by now, we think the answer is definitively in favor of tracking. There are several reasons why tracking employee time is a good idea for pretty much any kind of team and industry, so let’s look at just a few of them.

Team members working in front of a desk and looking at a computer screen

1. For payroll purposes

As passionate as we are about the work that we do, at the end of the day, one of the most crucial things for every employee is the question of how much money they’ll have earned after putting in their hours of hard work.

This is where tracking employee time really pays off—literally. To compensate your team members fairly, it’s crucial that your HR and accounting departments have accurate data to calculate the wages. This is particularly important with team members who are paid on an hourly basis and who might need to be paid extra in case of overtime.

And in the case of salaried employees, it’s just as good to know that they are meeting the overall work hours requirements – neither slacking off nor overexerting themselves.

2. To accurately bill your customers

If your work consists of project-based work for customers where you have to charge them for your team’s hours, tracking employee hours is essential. With the tracked time data at your disposal, you can bill your clients accurately down to the minute. Time tracking information gathered in an app can also serve as proof of work – you can show your clients exactly how long each team member worked on a particular aspect of the project or when work was started. Additionally, tracking the hours you’ve spent on one project can help you create a more accurate estimate the next time you’re dealing with something similar.

3. For decisions about personnel changes

Although that’s never a pleasant conversation to have, sometimes it’s necessary to let people go. And if the issue at heart is their work performance, it’s a good idea to have specific data on hand to prove that the decision was not made based on guesswork or personal biases. If someone is consistently late for their shifts or skipping out early, an app that tracks employee hours will make this pattern of infractions clear. On the other hand, if you’re looking for someone to promote, apps that track workers’ productivity and performance will greatly help in the decision-making process.

A woman sitting on the stairs and working on a computer

4. To gain insights into your team’s workflow

It’s also a question of not just individual performance but also how your team tends to work as a whole. For managers, it’s crucial to know how to plan the team’s workflow and resources so that the job gets done promptly and efficiently. If you track employee hours, it’ll be easier for you to identify the gaps in the system that need to be addressed. You may notice that at certain times people tend to stay longer than their indicated shifts simply because their colleagues need help with the workload. This might suggest that another team member is required there at that time, and you need to plan an extra shift.

5. For resource planning

Keeping track of your employees’ working patterns also helps you immensely with organizing your company life and planning expenses. You might realize that it may be time to downsize your office simply because people work more from home. Or you may need to make sure that the office snack supplies are at higher levels during certain days of the week because that’s when people tend to come in. Knowing how many people are at a certain location and at what times can even help you estimate utility costs for the future, allowing budgeting better.

6. To comply with regulations

Depending on the work your team does and where your business is located, you might be obligated to observe certain labor regulations (like overtime pay, total work hours, etc.). To make sure you’re compliant with the rules, you need an accurate way to track employee hours; this data will also serve as proof in case of a dispute. Meanwhile, employees can rest assured that all their hard work will be compensated fairly and that it’s all logged and documented.

7. To prevent burnout

Keeping an eye out on your employees and what they’re doing isn’t just about your company’s bottom line – as a manager, you also need to ensure that no one’s overworked and risking burnout. Employee time tracking will be particularly useful in this case when you’re dealing with remote teams. You can easily notice if someone’s staying way past their hours at the office, but it’s much harder to spot if they’re overworking themselves from home. Working from home, the boundaries between your work and private life can blend too much. So keeping an eye on employee hours can save you – make sure your teammates maintain a healthy work-life balance and don’t push themselves too hard, which will be highly counterproductive in the long run.

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Here’s how to get your team on board with tracking employee hours

While the decision to track employee hours seems like a no-brainer from the employer’s perspective, remember that your employees might feel apprehensive about it. 

Here are a few things you can do to introduce the new changes smoothly. First off, go easy on your team when you’re introducing a new time tracking program. Remember that it’s not just you learning how to track employee hours—your employees are learning too, and it’s going to take them a while to get used to it. 

Second, when you’re starting to track employee hours, make sure to choose a time tracking app that’s simple and easy for your team to use. For example, manual time trackers, while seemingly simple, can actually end up quite difficult and tiresome for employees to use. It’s best to look for automatic time trackers, so your workers won’t have to go through the hassle of starting and quitting the program each day—it’ll just run in the background of their computer. 

Third, when you’re introducing a time tracker to your team, make sure that you highlight the benefits that your employees will gain as well.

The accumulated data will help see everyone’s hard work even clearer; accurate time tracking data means that all of the extra work will show up in the data, and you can compensate it accordingly. Overtime will not go unnoticed, or if someone’s taken too much on their plate, the data will indicate that you should distribute duties differently.

Make it clear to your team that the decision to track employee hours will create a more honest, transparent work environment for everyone in the office. Plus, having access to this data will ensure that everyone gets a better work-life balance. 

You can also use the tracked time to reward your top performers in some way. If you see someone go above and beyond, they surely deserve some recognition from the top. At the end of the day, transparency at the workplace is key – accurate time tracking data will ensure a level playing field for everyone.

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