ROI for Employee Time & Attendance Systems
A time and attendance system with integrated time clocks can save large companies hundreds of thousands of dollars each year. Even for small companies, time and attendance systems and software pay for themselves after the first year.
The savings can be found in several places. First, time and attendance systems reduce time card audit time, saving employee labor time. Secondly, time and attendance systems eliminate employee overpayment because employees will not be paid when they take a long break or show-up late to work. Lastly, time and attendance systems eliminate human error - adding to the savings.
How Much Can Your Company Save?
And that's based on conservative estimates! Let’s dive into the details.
1) Reducing Time Card Audit
An automated payroll process reduces the amount of time an auditor spends calculating time card data. The American Payroll Association (APA) estimates that a payroll employee spends about 6 minutes calculating the data on a time card.
Audit Time Savings
|
Number of Employees |
25 |
50 |
100 |
500 |
1000 |
|
Minutes Saved Per Time Card* |
5 |
5 |
5 |
5 |
5 |
|
Total Hours Saved Weekly |
2.08 |
4.17 |
8.33 |
41.67 |
83.33 |
|
Wages for Payroll Clerk |
$20 |
$20 |
$20 |
$20 |
$20 |
|
Weekly Savings |
$41 |
$83 |
$166 |
$833 |
$1,666 |
|
Monthly Savings |
$166 |
$333 |
$666 |
$3,333 |
$6,666 |
|
Yearly Savings |
$2,166 |
$4,333 |
$8,666 |
$43,333 |
$86,666 |
* Studies from the APA show that manual totaling of timecards takes approximately six minutes per card. An automated system will reduce the process to just one minute.
2) Recapturing Wages
Wages are saved by time and attendance systems by eliminating payment for employees who take long breaks or come in late. The APA estimates that the average employee overpayment is 49 minutes a week. Below, we’ve used a more conservative 6 minutes, but the savings are still huge.
Lost Productivity Savings
3) Reducing Human Error
The final method of cost savings we’ll discuss is the elimination of human error. Simple mistakes can cost a company thousands of dollars by the end of the year. The APA has cited a human error rate of between 1 and 8%. We’ve used an even more conservative rate: 0.25%.
Savings from Human Error Elimination:
|
Number of Employees |
25 |
50 |
100 |
500 |
1000 |
|
Average Hourly Wage |
$10 |
$10 |
$10 |
$10 |
$10 |
|
Average Hours Worked Weekly |
40 |
40 |
40 |
40 |
40 |
|
Total Weekly Payroll |
$10,000 |
$20,000 |
$40,000 |
$200,000 |
$400,000 |
|
Human Error Factor* |
0.0025 |
0.0025 |
0.0025 |
0.0025 |
0.0025 |
|
Weekly Savings |
$25 |
$50 |
$100 |
$500 |
$1,000 |
|
Monthly Savings |
$100 |
$200 |
$400 |
$2,000 |
$4,000 |
|
Yearly Savings |
$1,300 |
$2,600 |
$5,200 |
$26,000 |
$52,000 |
* Studies have shown that the inaccuracy of time calculation to be between 1% and 8%. We have used a very conservative 0.25%.
As you can see, small numbers add up very quickly. It’s easy to see that even a small company will see the ROI within one year.
For more information contact ClockView from Acumen Data Systems to find out how we can tailor an employee time and attendance system to fit your company’s unique requirements.
