How Employee Time Tracking Can Save Money for Your Company

The US economy loses 50 million hours ($7.4 billion) a day in productivity, according to HBR

Here’s why this happens — companies often rely on employees to log their efforts into a timesheet manually. 

Expecting employees to log the time they spend sending or replying to emails is highly impractical and time-consuming. Besides, manual systems are notoriously error-prone.

Moreover, depending on an honor system for time tracking can lead to time theft and buddy punching. All it takes is a few rotten apples to build an atmosphere of distrust and stress at a workplace. 

The cost of manual time tracking

While there are several downsides to manual time tracking, we’re going to explore the top three.

1. Time theft can cost up to 7% of the annual payroll

APA (American Payroll Association) reports that almost 75% of businesses in the US suffer from time theft — when employees are paid for hours they didn’t work by recording their hours inaccurately. 

While some might take advantage of the honor system to exaggerate their work hours, for most, it’s unintentional. For example, an employee working from home could have logged into their system, and then get distracted by household tasks. It gets tougher for those juggling or caregiving along with their jobs. 

Even a few minutes can add up to an insane amount — up to 7% ($70,000) of the annual payroll. 

And a major reason for time theft in the first place — web portals to log time manually.

2. Payroll errors can cost 1-8% extra

The same APA survey also highlights how almost 33% of employers make payroll errors, thanks to manual data entry. The cost of such errors is significant — 1-8% of the total payroll. 

Here’s an example to put these numbers into perspective. For a small business employing 20 people with an average salary of $50,000, the losses can add up to anywhere between $10,000-80,000 every year.

3. Buddy punching affects nearly 75% of companies

Another top consequence of manual time tracking is the practice of buddy punching — one employee covers for another by clocking in on their behalf. Buddy punching is illegal, unethical and affects almost 75% of the companies in the US according to the APA. 

For a small business with 20 employees and an average salary of $50,000, the approximate hourly pay is $24 (40-hour work week). Even if one employee clocks in 30 minutes early to cover for their colleague, that’s an extra $12, or $25,000 annually.

How an automated time tracking software with anti-fraud mechanisms can help

It all starts by gaining complete visibility into your employee’s efforts. Tracking their work automatically helps businesses gauge the financial value of the work done. 

For employees, such a system is:

  • More convenient, accurate, and minimally disruptive
  • Effective in understanding how they work
  • Useful in tracking activities that seem trivial but can eat up a sizeable chunk of their workday (like emails) 

That’s where a software facilitating automated employee time tracking (in real-time) and equipped with robust anti-fraud mechanisms can help. 

Let’s look at the top benefits of such a software.

1. Eliminate manual errors with automated time tracking

Using an automated employee time tracking software, employees can set up reminders or notifications to punch in at the right time. Once logged in, the software would track time spent on various activities automatically. 

A good software allows employees to log in using the device of their choice — desktop, laptop, tablet, mobile, or an API. The software would also work offline (without an internet connection) so that time tracking is uninterrupted.

2. Avoid time thefts and buddy punching with a real-time anti-fraud mechanism

The best employee time tracking tools are equipped with an anti-fraud mechanism to prevent time thefts or buddy punching by verifying the following in real-time: 

  • The device type, date, and time of log in
  • Location tracking via GPS
  • WiFi configuration tracking 
  • IP validation

Plus, a great employee time tracking solution comes with facial recognition and voice commands. So, employees can use biometrics to log in and track their activities. 

The voice commands facilitate touchless clock in at companies that require employees to work on-site — a must in the age of a highly contagious pandemic. 

3. Get better at planning projects and allocating resources 

Without knowing the actual time taken per task, it’s impossible to come up with a realistic estimate of resources needed for a project. An employee time tracking software can track time spent on productive and unproductive (work that doesn’t add any value to the project) tasks to:

  • Improve productivity and work habits
  • Flag overtime (as these employees could be close to burnout)
  • Estimate the resources required more accurately to avoid missing deadlines or stretching teams too thin

4. Improve employee motivation and productivity

Whenever employees reach their time limits, an employee time tracking software notifies the right supervisors immediately to avoid extra work hours.

Time tracking also lets employers know which employees need rewarding and which ones need coaching by comparing the time taken to perform a certain set of tasks. For instance, if one employee takes four hours to finish a task that another took just an hour to wrap up, it’s a sign that the first employee might be facing some challenges. 

Merely tracking employee time without offering support might make them feel disengaged and disconnected, much like Dilbert.



Instead, tracking time and then talking to employees to know how to help them at work can:

  • Improve performance
  • Boost morale, motivation, and workplace engagement
  • Avoid burnout
  • Foster a long-lasting workplace relationship that keeps talent attrition in check 

Three things to consider before investing in an employee tracking solution

While an employee time tracking software can seem like a silver bullet for all productivity, payroll, regulatory, and cost-related problems, there’s a catch. The software you choose must meet your needs and match your budget. 

That’s why it’s crucial to look for three things when evaluating various employee time tracking software:

  1. The cost: Ask about upfront investments and licensing fees. Also check for costs of training, implementation, and support.
  2. The learning curve: Check the amount of training required to use the solution.
  3. The infrastructure: Understand the IT requirements to implement the solution and find out how long it will take to set up the tool. Don’t forget to check whether it integrates with your existing HR technology stack. 

How Oitchau can save money for your business

The right employee time tracking software can save 1-7% of payroll costs. That’s where Oitchau can help.

OiTchau offers a cloud-native, user-friendly application that tracks activities in real-time and stores all crucial employee data on a single platform.

The platform has a sophisticated anti-tracking mechanism that verifies the device, location (via GPS, WiFi details or Bluetooth), and IP address to prevent time thefts and buddy punching.

Sign up for a free trial to explore the various ways in which OiTchau can save money and improve overall productivity at your workplace.