The End of Time as We Know It

By: Gregg Dourgarian
Date: 5/1/2008

Time clocks have come a long way since the 1970s. Back then, paper punch cards and ink cartridges ruled the day. Employees cheated by buddy-punching for each other to get paid without working. Employers hired guards to watch over these systems, but even the guards could be hoodwinked or involved in the scam. In one of my all-time favorite movies from that era, Breaking Away (a comingof- age rivalry between townies and preppies), a townie "punches" a time clock to pieces as a way of telling his boss to take the job and shove it.

Although many companies still use these antiquated devices because of their low purchase price, they cost far more in fraud and inefficiency than modern time clocks with their biometric and bar-code interfaces that integrate real-time with information systems.

The Old Way: Expensive, Insecure and Stand-Alone

At best, the stand-alone clock does little more than collect time. Employees punch time and somehow the data makes its way back to the payroll office. Whether by fax or spreadsheet, you need payroll staff to get the data transferred into your payroll system. Often, they have to reenter the data into an invoicing system, as well. I've seen it where they have to reenter into yet another reporting system, too.

The expense doesn't stop there. You need staff to guard the system and set up new employees. You need to stock the time cards and ink cartridges. Even if the system exports data to a file, you need to coordinate getting that data to your back-office system. This may sound simple, but I've seen it where this manual step - the manual transfer of a data file - resulted in several hundred employees getting paid incorrectly because the wrong file got used. Every time you allow manual intervention, you open yourself up to costly human mistakes.

Staffing companies can bear the brunt of these mistakes. Often, a staffing client wants the time clock data to drive not just the hours worked, but also by department code with overtime differentials, break-time, and cost codes built in, too. If you've been in staffing for long, you know that customers are very sensitive to billing mistakes, errors in job codes, cost-center codes, and the like, which can cost a capable agency a good contract.

The delay in getting time clock data costs both the staffing company and the end-client dearly. If you are tracking time on a system other than your live back-office, you're playing a waiting game. You wait until you get data to generate an invoice. You wait to get your sales and profit reports. Worst of all, your customer waits to get complete and accurate billing information. All of these things add up to lost profits, poor customer service and ineffective decisions.

The New Way: Profitable and Secure Modern time clock systems drive down costs, provide indispensable security, and integrate with all aspects of logistics.

They drive down costs in many ways. They accurately record employee time, eliminating overstated hours and typos. They allocate the hours to the appropriate cost codes, helping to identify inefficiencies - overtime on the loading dock can be spotted in minutes, not hours. For a staffing company, they eliminate data reentry and costly mistakes like inconsistent application of pay rules.

Biometric and badge based clocks become the cornerstone of security. They eliminate buddy-punching and other forms of theft. They allow pre-defined roles for each employee and can thus drive policies like access-restrictions to sensitive areas. A staffing company can track in real-time which employees fail to show up on-time and can quickly respond to noshows or other service problems without waiting to hear from a client first. They can also make sure a deactivated employee doesn't gain fraudulent admittance to the client site.

Breaking Away

Technical solutions like the ones I am describing are no longer toys that marginally improve back-office processes. As a solid ROI stepping stone, they pack a tremendous punch for breaking away from the pack, positively impacting your client relationships.

Gregg Dourgarian is the CEO of TempWorks Software. He can be contacted at 651.452.0366, or by email at greggd@tempworks.com. TempWorks provides staffing software and business solutions for the staffing industry. Now you can get a FREE trial edition of the TempWorks Enterprise software system - sign up at www.tempworks. com.