Unsung Hero of Human Capital Management Can Deliver Huge ROI
– Mike Anderson, Founder & CEO
Human Capital Management (HCM) systems typically consist of four main functional areas: Time and Labor Management (TLM), payroll, HR, and benefits. Top-notch HCM systems like PayNorthwest’s seamlessly drive these four areas from a single database and a responsive user interface. The smart application of TLM holds the highest potential ROI of any component of an HCM system.
While the full value of a unified HCM system exceeds the sum of its parts, each one of these areas – TLM, payroll, HR and benefits – can drive significant value. In our experience over many years of selling, implementing and supporting HCM systems, TLM gets the least amount of attention, is the most underappreciated, and yet often presents the biggest opportunity to return huge value to the organization that uses it smartly.
One issue we often encounter from the beginning is that TLM suffers from an image problem. First, TLM goes by many different names, with no general agreed upon standard. Time & Attendance, Time and Labor Management, Workforce Management, Time-tracking, even Time Clocks or the dreaded Punch Clock all get used synonymously. Second, many people, when they think of TLM, think of the old punch clock, most likely the one that made the sound of a staple gun every time an hourly worker pushed in her time card. Ka-chunk. Of course, time clocks have evolved far from those old mechanical dinosaurs. Today, they are electronic, often use biometrics instead of time cards and quite frequently the clock is entirely replaced by a mobile phone or desktop computer. Third, many people mistakenly think that TLM is only for hourly workers and not salary or exempt workers. Finally, people assume, again mistakenly, that TLM is just about tracking hours worked. All these images and assumptions about time tracking are outdated and underestimate the ways TLM can be used to improve productivity, compliance and employee engagement.
TLM encompasses much more than tracking hours worked. It now includes time and accrual tracking, absence and leave management, scheduling, workforce planning, attestation and labor allocation. It provides insights and information that enables workers and managers to make more informed and better decisions, all while eliminating significant waste. Time and Labor Management is an immensely valuable tool for businesses and can drive labor productivity gains across your entire organization, reduce costs and risk around regulatory compliance, improve employee morale by creating fairness and taking perceived supervisory subjectivity and bias out of the conversation.
Here are some of the big benefits of deploying TLM as a part of a cloud-based, unified HCM solution:
Reduced Time Inflation or Theft
- Rounding rules keep employees from clocking in “just a few minutes early” day after day after day.
- Eliminate buddy punching through biometrics
- Eliminate ability to falsify or “fudge” records (e.g., by requiring employees to clock in and out only at certain IP address or geo-coordinates if mobile)
- Visibility in real time to see who is available to fill absences
- Automatically record absences
- Notifications to managers when absences occur or exceed thresholds
- Easily confirm eligibility for paid/unpaid leave based on user-defined criteria
Reduce Unnecessary Overtime
- Real-time visibility in employee hours worked
- Notifications when hours approach overtime or schedules exceed budget
- Accurate, up-to-date schedules
- Highly configurable rules engine applies overtime rules relevant to each workplace jurisdiction
- Track and manage benefit data such as vacation and sick time for ALL employees, including salaried and Exempt.
- Eliminate “Leave inflation” by the proper deduction of PTO through the system
- Automate federal, state and company leave requirements
- Automate eligibility determination for benefits such as vacation time, sick leave and FMLA
- Receive automatic alerts to flag action items
Reduce Wage and Hour Compliance Costs and Risks
- Track part-time vs. full-time work
- Calculate and manage rules across multiple locations and jurisdictions
- Create and sustain a culture of compliance and accountability among your entire workforce
- Minimize overtime
- Centralize wage and hour policy administration
- Maintain detailed audit records
- Attestation by employees of accuracy of hours worked
Increase Labor Productivity
- Plan and manage labor costs across a widely dispersed organization
- Track hours worked by location, department, job and more
- Labor allocation and job costing visibility
- Intelligent scheduling engines allow you to allocate skilled resources to meet short and long term needs
- Volume-based workforce planning
- Increased administrative productivity through automation, error reduction, capturing data at the source
- Better decisions by supervisors and managers due to increase visibility to real-time data, information and insights
Time and Labor Management is a powerful tool that can drive significant gains across your entire organization. HR, finance and operations managers all have a vested interest in maximizing the value of this often unsung hero of HCM.