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
5 comments:
The objective of a time attendance system is to determine, without much hassle and time wastage, the attendance and time spent at work by each employee. Proper time and attendance system help businesses to save time and effort by organizing employee attendance and leave record in a more digital way and providing them the best of business opportunities. Time and attendance software system helps to save time and payroll for an organization.
The business is crucial in terms of expenses. It is important to know how to budget the expenses. The free MYOB training course knowledge quiz is important and this means that you will learn more about it and be able to handle business well.
It is easy to work and record on the attendance if the monitoring is based on online monitoring. The Mornington Bookkeeping would suggest of this type. This will make your jobs easier and even easy to back track any possible discrepancies.
It would be better to automate the attendance tracking. The
digital marketing would also be very happy to know about this. This could be a good way of getting better and easier work. Thanks
Attendance is really important. It will really be a good indication of effective employees if they are always present. I hope this can help us in getting the goal.increase web traffic.
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