Time and Attendance Systems and Return on Investment
Time & Attendance and Return on Investment
Autor of the Time & Attendance Consultant's Guide Series
Cashflow, of course, is King, but that aside, Time & Attendance Systems have the capacity to provide a significant return on investment through the elimination of time theft, process improvement and the reduction of calculation errors but, that saving is not a significant as some would have you think.
After implementing perhaps two and a half thousand time and attendance systems over the last 15 years and measuring the savings, I would have to say that whoever came up with the ROI figures was "dreamin'. Having said that, the real number, and by this I mean the one that actually tested, still looks very attractive.
Over the years and with help from some clients, I have measured the payroll cost savings, and on average, they would run at about 0.35% of the annualised payroll. Doing the numbers again on the same number of employees used earlier the annualised savings on a 100 employee system would be $14,560.
Clearly, this is a much more modest ROI, but, it is still a significant number, and it means that a typical system would pay for itself in twelve months or so.
The numbers used in this analysis are the measurable ones. The less tangible ones, such as less dependency on the payroll officer and the conversion to electronic data for more efficient storage and recovery, are often underestimated.
It is important to note that not all time and attendance systems are created equal. Most of the true savings are going to be achieved by implementing a system with reliable biometric hardware and a flawless award interpreter. If the payroll department is forever overriding missing clocking events or calculation errors typical in entry-level systems, then the premise on which the system will save money is lost.
This is not to say that your business won't benefit from an entry-level attendance system. That depends entirely on what you are trying to achieve. If you simply want to convert to electronic recording of attendance without award interpretation, then this is certainly a sensible approach within itself.
If you would like more independent information on time and attendance systems you can contact me by email at email@example.com