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This feature article highlights the return on investment that your organisation could achieve by implementing an effective Time and Attendance System
So management have identified a need within your organisation for a new Time and Attendance system, and you have been tasked with shortlisting the potential vendors.
What next?
By now, you have more than likely run a search on Google, trawled various websites, downloaded many case studies and feature articles, or watched some online videos and demos.
BUT while you may be able to list a batch of Time and Attendance vendors and the many different features and benefits of their particular systems, when it comes to presenting your case to senior management, there is one thing that will matter most to them - "Just how much time, money, and effort will we save by implementing an automated Time and Attendance system?"
To gain a better understanding of the return on investment (ROI) an organisation could expect to achieve by implementing a high quality Time and Attendance system, take a look at the sample below:
OZ Pty Ltd is a Meat Packing facility with 120 employees working on average 40 hours per week.
80 Floor Staff: $20 p/h
10 Senior Floor Staff: $22 p/h
15 Admin Staff: $23 p/h
8 Senior Admin Staff: $25 p/h
6 Line Managers: $30 p/h
1 Director: $40 p/h
Total Average Pay: $26.66 p/h
Now, based on the assumption that the implementation of a new Time and Attendance system will consequently reduce overpayment, potential for human error, and associated administration costs, we will examine the ROI that OZ Pty Ltd could reasonably expect in the first 12 months after installing a new Time and Attendance system.
It may come as a surprise to you that your employees could be overpaid by up to 30 minutes per day. This is primarily due to lateness, early leaving, long lunch breaks etc.
A good Time and Attendance system will significantly reduce overpayment as once your employees know that their attendance, start/finish times, and breaks are being closely monitored, overall attendance and punctuality will generally improve.
At OZ Pty Ltd, if we assume a conservative 1% increase in attendance, then the following savings could be made each week:
Number of Employees: 120
Total Hours Per Week: 4800
Total Weekly Pay: $127,968.00
Hours Gained Weekly: 48.00
SAVINGS PER WEEK: $1,279.68
While this is good and well for workers paid an hourly rate, what about salaried employees I hear you ask?
In our experience we have found that even organisations with salaried staff can benefit from tracking employee time and attendance. For example; like those on an hourly rate, once salaried staff realise their start/finish and break times are also recorded they will generally be more punctual - boosting workplace productivity.
In addition, supervisors and management can run detailed attendance and absenteeism reports, enabling them to identify potential problem areas before they get out of hand and effect your bottom line. Real time attendance reports will also identify who is onsite, facilitating Health and Safety and Fire Evacuation procedures.
Cost savings may also occur as employees stay at work over their standard hours.
With a manual clock card or timesheet system, there is greater potential for human error at each stage of the payroll process. Companies using a manual system are likely to be experiencing an error rate between 1 and 5%.
In the case of OZ Pty Ltd, if we assume a Time and Attendance system can reduce this by a conservative 0.5%, then the following savings could be made each week.
Number of Employees: 120
Total Hours Per Week: 4800
Total Weekly Pay: $127,968.00
Rate of Human Error Weekly: 0.5%
SAVINGS PER WEEK: $639.84
It is estimated to take up to 7 minutes for supervisors/managers to manually calculate and edit each individual timesheet/clock card, and an additional 2 minutes to manually enter data from each timesheet/clock card into a payroll system.
An automated Time and Attendance system will eradicate these time consuming manual tasks, and work seamlessly with your payroll application to remove the double entry of data and potential for human error.
For OZ Pty Ltd, if we assume that a conservative 5 minutes per timesheet/clock card for the calculation and data entry process could be saved, then the following cost savings could be made each week.
Number of Employees: 120
Calculation and Entry (hours): 10
SAVINGS PER WEEK: $266.66
Based on these calculations, installing an automated Time and Attendance system could save OZ Pty Ltd up to $2,186.18 each week, amounting to an estimated annual saving of $113,681.36.
Now, what organisation wouldn’t like to achieve those figures?
Interested in finding out exactly how much your organisation could save by implementing an intelligent Time and Attendance System?
Why not, try our ROI Calculator for yourself or contact us on 1300 884 831 to speak to one of our experienced consultants.
© 2012 Mitrefinch Australia
