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Small Business Digest


Timeclocks Offer Positive Advantages For Employers, Employees

Timeclocks Offer Positive Advantages For Employers, Employees
While timeclocks may be an echo of the past, nonetheless, they do serve a positive function.

In studies conducted by independent researchers, employee morale can actually improve when timeclocks are introduced.

According to researchers, many employees know of fellow staff members who regularly come in late or leave early.

Often these staffers are not caught or disciplined because there are no truly effective means of documenting their hours.

Surprisingly, the electronic systems often end up raising employee morale, according to Doug Marsh, CEO of TimePilot Corporation (, an Illinois-based company that manufactures time and attendance systems for offices, workshops and outdoor construction sites.

“Employees know that you can’t cheat the system, so they are reassured that their co-workers aren’t getting away with anything,” he said. “Everyone is held to the same standard—an hour’s pay for an hour’s work.”

The added benefit, Marsh said is that employers “raise the morale of (your) best and honest employees, the ones you want to keep happy.  You also eliminate busy work filling out manual time sheets, something no one likes to do.”

While many workers have the image of standalone mechanical timeclocks, the modern version reduces paperwork by capturing and transmitting data electronically, a significant cost saver.

As a fully integrated system, offerings such as Timepilot utilize existing employee management tools.  Employees tap or swipe their ID device at the clock, which records their identity and their clock-in or clock-out time. At the end of the pay period, the person handling payroll uses the system’s software to examine the clock-ins and clock-outs, make any necessary corrections (if an employee forgot to clock out, for instance), generate reports and prepare the data for their payroll software or service.

Thus, a company has both an electronic and human oversight of the system.

Electronic time and attendance systems have been around for years, but only recently have their cost become reasonable for small businesses. The systems generally consist of a wall-mounted timeclock, software and a device—usually a magstripe card or a key-sized device called an “iButton”—that’s issued to each employee and identifies the employee to the system. \

Electronic time and attendance systems save companies money in several ways:

• Because employees clock in and out with a device that positively identifies them to the system, “buddy punching” (when a worker clocks in a friend who isn’t there) is reduced or eliminated.

• The systems track employee hours down to the minute. At the end of the workday, few people can recall the exact minute they started work that morning. The systems put an end to the cases of “I think I started at 8 a.m.” when they really started at 8:03.

• Manually calculating your employees’ work hours takes time and care. (Quick: How long has an employee worked if he started at 7:53 a.m. and quit at 5:17 p.m.?) A recent study found that math errors cost companies between 1% and 8% of their gross payroll, and that it takes about 7 minutes to calculate one employee’s work hours on a single time card. Punchclock and timesheet systems’ hidden costs—errors, calculation time and supplies—add up fast.

What to look for in a system?

• Easy-to-understand software. Clocking in and out is easy with any system, but the big change is for the person who does your payroll. It’s crucial that they understand how to use the software. Look for software that is clear, intuitive and explained well. If the vendor offers a trial version, download it and play with it to get a feel for how it works.

• Durability. Employees don’t adapt easily to an electronic system (although these systems often end up raising morale, as Marsh said), so a system should be able to stand abuse. Look for a durable clock and consider an iButton-based system. Magstripe cards crack, get creased, can lose the data encoded on the magnetic strip and transfer dirt and grime to the timeclock. iButtons have an infinite lifespan, are impervious to water, chemicals and magnetic fields and work as well in dirty environments as in clean ones. (Companies such as TimePilot even makes a weatherproof system that is designed to be used at construction sites).

• Expandability. It’s important to allow for the growth of your company. You don’t want to be hamstrung by a system that’s too small for you. Look for a system that can handle 25% to 50% more employees than you will use now. Also, look to see how much—if anything—you’ll pay to add employees to the system. Some companies make you pay extra for extra employees, others don’t. TimePilot, Marsh’s company, has written its software to accommodate as many as 2,000 employees at no extra cost (except an iButton for each employee).

• Versatility. Does the manufacturer offer different types of clocks that combine to make up a single system? For instance, a weatherproof clock at the job site, a wall-mounted clock in the shop and a PC-based clock in the office. 

• Interfaces to Payroll systems:  A system should export the payroll data in a format that can be used by your payroll software or company i.e. ADP, Paychex, QuickBooks, etc.?  Watch out for special time clock deals from payroll vendors and other resellers as many of their offerings will restrict you to their software or service and require custom programming to get the job done.

• Reporting:  Good standard and customizable reports are a bonus and the ability to export data to MS Excel for job costing, management reports and presentations is your insurance that you’ll be able to accommodate future needs.

For more details about Timepilot, go to

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