The true value of implementing an effective Time and Attendance System

OK, so your organisation has identified a need for an automated Time and Attendance system.

You've started your search on Google, checked various websites, and maybe read some articles, whitepapers, or watched some online videos.

By now, you're probably an expert in naming the various Time and Attendance vendors and the features of their systems. But in reality when it comes to presenting your proposition to senior management, there will be one thing which will matter most to them - how much time, money, and effort can the organisation plan to save by implementing a Time and Attendance system?

Let’s have a closer look at the example below, 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.

Company XYZ Pty Ltd has 120 employees working on average 40 hours per week.

Average Pay Per Hour
80 Production Staff: $20 p/h
10 Senior Production Staff: $22 p/h
15 Admin Staff: $23 p/h
8 Senior Admin Staff: $25 p/h
6 Managers: $30 p/h
1 Director: $40 p/h
Total Average Pay: $26.66 p/h

Now, we will calculate the ROI that XYZ Pty Ltd could reasonably expect in the first 12 months after installing an automated Time and Attendance system.

This is based on the premise that the implementation of the Time and Attendance system will consequently reduce overpayment, human error, and administration costs.

OVERPAYMENT
A good Time and Attendance system will significantly reduce overpayment. Once employees know that their attendance, start/finish times, and breaks are being monitored, overall attendance and timekeeping will generally improve.

It is possible that employees may be overpaid by up to 30 minutes per day due to lateness, early leaving, long lunch breaks etc.

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?

In our experience we have found that even organisations with salaried staff can benefit from tracking employee time and attendance. For example cost savings will still occur when employees stay at work over their standard hours, plus management can view detailed attendance and absence reports, enabling them to pin point potential problem areas before they get out of hand.

HUMAN ERROR
With a manual punch 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%.

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

ADMINISTRATION COSTS
On average it is estimated to take up to 7 minutes for Managers to manually calculate and edit each timesheet/clock card, and a further 2 minutes to manually enter data from each timesheet/clock card into a payroll application.

An effective Time and Attendance system will eradicate these time consuming manual tasks.

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

CONCLUSION
Based on these figures, installing an automated Time and Attendance system could save XYZ Pty Ltd $2,186.18 each week.

This equates to an estimated capital recovery of $113,681.36 per year.

Now, what organisation wouldn’t like to achieve those figures!

Interested in finding out exactly how much your business could save? Why not, try the Mitrefinch Return on Investment Calculator for yourself!

For more information on Mitrefinch's Employee Management Solutions don't hesitate to contact us directly on 1300 884 831 or via email on sales@mitrefinch.com.au

Employers to run Paid Parental Leave Scheme through their Payroll or risk large fines

Aussie businesses could face fines of up to $33,000 if they fail to run the government's new paid maternity scheme through their payroll.

Thousands of mothers have applied for the $570-a-week paid parental leave scheme since it was introduced on January 1, according to new figures released by Families Minister Jenny Macklin.

Faced with a choice between the paid parental leave scheme offering up to $10,000 to working mums and the $5000 baby bonus, available to stay-at-home mums, eligible parents are flocking to the new scheme, with over 15,500 families lodging applications to date.

But small business groups are fighting back over demands they administer the scheme after July 1, with a legislative showdown brewing as Parliament resumes. They advise that many employers’ simply are not aware of the scheme and the potential fines they could face for failing to comply.

MPs will vote on Coalition reforms to force the Gillard Government to instruct Centrelink to keep running the scheme.

Ms Macklin told Sunday Herald Sun she was determined to see the scheme administered by business rather than Centrelink. "Paid parental leave is a workplace entitlement, just like annual leave or sick leave," she said.

"Our scheme helps employers retain skilled and valuable staff...It's important for women to maintain a connection to the workplace.”

"Employers will pass on Government-funded parental leave pay to their long-term employees through the employee's usual pay cycle and will receive the funds from the Government in advance," she added.

But the Opposition’s Small Business Spokesman Bruce Billson said: "It's an unnecessary burden on small business and exposes employers to big fines."

The Council of Small Business of Australia (COSBA) Executive Director, Peter Strong, said there was little explanation for the red tape other than a philosophical view that the maternity payment should be a workplace entitlement rather than a welfare payment.

"It's about time the Government funded paid maternity leave and that's great, but we don't want to be the paymaster," he said.

Parents can apply for the taxpayer-funded scheme up to 3 months before the birth of their child and can take it in conjunction with, before or after any employer-funded leave. It is taxed but can also be transferred to fathers if mothers return to work early.

(Sources: Sunday Herald Sun and Payroll News)

Eliminate Time Theft in your business with a Biometric Time and Attendance Solution

Keeping track of staff worked hours can be a tedious task for any business. Add to the fact that left unsupervised, some staff may be ‘buddy punching’ or clocking in for their colleagues, adding thousands of unearned dollars to your payroll costs each year.

Fortunately, there is an answer to all of your problems!

While your staff may have found a way to cheat your current time management system, switching to a biometric time and attendance solution can eliminate buddy punching and time theft within your organisation once and for all.

Biometric Time Clocks guarantee that your employees must be present to clock in/out of work. With the touch of a finger, they can quickly log and verify their attendance, instantly improving the accuracy of your attendance records.

By eliminating ‘buddy punching’, you will notice a signification reduction in payroll and overhead costs and a subsequent increase in employee productivity. In addition, Biometric Time Clocks can bring extra security to your business by ensuring that imposters cannot force their way onsite.

Utilising the very latest biometric technology, Mitrefinch’s Biometric Time Clocks use multispectral imaging to capture accurate and high-quality images by exposing the fingerprint surface and subsurface at the same time.

This pioneering technology ensures that Mitrefinch’s Biometric Time Clocks can capture and enrol employees even when skin surface features are absent or hard to distinguish due to age, dirt, finger pressure, and skin or environmental conditions.

The unique ability to provide universal fingerprint capture eliminates costly administrative problems and security risks that occur when employees can’t register on conventional fingerprint devices.

Think you may have a problem with ‘buddy punching’ in your business? What are you waiting for?

Contact Mitrefinch today for a free consultation and find out how our clients are already reaping the benefits of a Biometric Time and Attendance System.

Call 1300 844 831 or visit http://www.mitrefinch.com.au/