24 Mar Employee Labor is Expensive. 4 Ways to Reduce the Cost
In most cases, employee wages are among the greatest expenses an employer faces each month. It makes good business sense then to consider how to minimize this expense, but employers are often unaware or perhaps feel too busy to even begin the discussion. Enter… automated timekeeping.
The good news for employers is that labor and payroll expenses can be reduced. In fact, there are many opportunities to gain control and cut costs without sacrificing production or value with a few essential tools. Automated timekeeping is perhaps the most important. Whether it’s eliminating hours of overpaid wages and unnecessary manual administration, employers can… and should… take steps to minimize their payroll costs.
Here are just 4 ways automated timekeeping reduces your labor expenses.
Eliminate Punch Rounding & Approximating – Doesn’t it make perfect sense to pay employees for their actual time worked… not a rounded best guess? When employees round or approximate their punch times, they round in their favor and employers end up overpaying for labor… by a lot!
The average employee records 4 punches per day including lunch punches. If they are rounding to the typical nearest 15 minute increment, then employees can round in their favor by as much as 7 minutes per punch.Do you know what 15-28 minutes per employee per day is costing you? It’s a shocking number. Don’t let this outdated practice cost you. The fix is simple. Pay employees to the minute with ease using automated timekeeping.
Put an End to Costly “Buddy Punching” & Time Theft – “I’m running late. Can you just clock me in?” Sound familiar? It happens all the time… and it costs you dearly. The American Payroll Association estimates that over 75% of employers experience loss associated with “buddy punching” both in wages and productivity. Other forms of time fraud and theft are rampant in companies that don’t offer an automated solution for employees, managers and payroll staff.
If your process allows for this to occur, you have no one else to blame. Your staff is simply too busy to catch, chase or investigate each occurrence.The fix is really quite simple. It’s automated timekeeping with biometrics. Today, an inexpensive plug-and-play biometric time clock can be easily set up to verify an employee at the clock. Do yourself and your frustrated staff a favor by curing time theft and buddy punching.
Minimize Payroll Mistakes & Human Error – Human error can be an immense expense for employers. The APA estimated human error in time card preparation to be between 1% and 8%. With a $500,000 annual payroll, even a 2% error rate represents $10,000 in erroneous wages.Fixing mistakes also has its costs with administrative time, reprocessing fees, re-issuing checks and so forth, in addition to the frustration caused for all parties involved. Automate tracking and time card preparation with timekeeping. Your payroll staff will love you for it.
Minimize Overtime Costs – Getting the job done for your clients is top priority, but are you managing and minimizing your overtime exposure?With automated timekeeping and scheduling, perhaps you can no longer pay all those employees an extra 15 to 60 minutes of overtime per week resulting from an extra 15 minutes per day. You can easily schedule when employees work, get notified about employees approaching overtime, and have clear visibility of actual versus scheduled hours.
More than likely, without automated timekeeping or a stiff OT policy you’re paying employees thousands in unnecessary overtime wages at time-and-a-half pay simply because you’re not using an automated timekeeping solution.
In conclusion, automated timekeeping is a small but tremendous investment for employers! Believe it or not, there are many more ways to save! Start putting more of your hard-earned revenue back in the bank with automated timekeeping.