The laws governing employee time tracking are not always clearly defined. Things like overtime and meal breaks are managed differently state by state. However, every employer covered by the Fair Labor Standards Act is obliged to keep records for their employees, including the hours worked each day and the total hours worked per week. What kind of data must be collected and what role does data...
You’ve probably seen it at some point in your professional life: the classic Excel sheet used for time tracking. It is complicated, error-prone, and not necessarily user-friendly. Modern solutions track time online and offer far more than mere time tracking. Some of these tools are also specifically designed for small business and are relatively inexpensive. And with growing demand, they can often be enhanced.
- What can an online time tracker be used for?
- How does online timekeeping work?
- Work-related versus project-related timekeeping
- Advantages of an online time tracker
- Disadvantages of the online timekeeping system
What can an online time tracker be used for?
While a company is being established and just afterwards, its focus is often on things other than tracking working hours. Entrepreneurs often trust employees themselves to be mindful of adhering to the working hours stipulated in their employment contract.
It’s true that trust is good, however, it’s common knowledge that oversight is better for all parties involved. If you track working hours, you learn not only if someone is shirking their work. You also see if your employees are working too much. That can become a problem as well. On the one hand, overtime hours are regulated by law; on the other, excess work can be detrimental to your employee’s work-life balance and even their health.
With this in mind, time tracking has another function in addition to merely displaying the working hours that have been achieved: They can also reveal a company’s time and personnel shortages. If your employees work too much, this might mean that you need additional staff or that processes need to be optimized.
How does online timekeeping work?
An online time tracker is considerably easier to use and more convenient than an Excel sheet. It has three different models:
- Web-based time tracker
- Tracking via desktop app
- Tracking via mobile app
Many tools enable all three versions. This has the advantage of enabling the employee to record their working hours completely independently of where they are located at any given time. Mobile apps also often allow you to record hours and synchronize them later on when there is an internet connection again. The data is then stored in a cloud and automatically synchronized across the various devices.
Work-related versus project-related timekeeping
Workings hours can be tracked in two different ways. With work-related tracking, only the arrival and departure times are tracked, as well as break times.
Example of work-related timekeeping
The employee starts working at 9 am. At noon he takes a one-hour break. At 6 pm he calls it a day.
With project-related timekeeping, in contrast, individual activities, projects, or customer service hours are tracked. This is important in many agencies, for example, or specialist departments that do the groundwork for other departments within the company. In doing so, not only is the total working time tracked; how much time the employee takes to complete a specific project is also determined.
With online timekeeping, you can set your budgets or hourly rates for specific activities or projects. These tools display the hours that employees have spent on specific projects using descriptive diagrams. This has the advantage of enabling you to keep an eye on a project’s progress and its cost-efficiency. If only a limited amount of time or budget is available, then you’ll immediately see when this will be reached or even exceeded.
Examples of project-related working hours timekeeping
9:00 am to 9:30 am: Read and respond to e-mails
9:30 am to 10:30 am: Team meeting
10:30 am to 12:30 pm: Work for customer X
12:30 pm to 1:30 pm: Lunch break
1:30 pm to 2:30 pm: Work for customer Y
2:30 pm to 3:00 pm: Project meeting
3:00 pm to 4:00 pm: Work for customer Z
4:00 pm to 6:00 pm: Work for customer X
Advantages of an online time tracker
An online time tracker has numerous advantages in comparison with time tracking with an Excel sheet or stationary terminals, and can be especially practical for new businesses. Below are some examples of how or in which areas the online time tracker demonstrates its strengths.
Simple implementation and operation
Online time tracking tools can be quickly and seamlesslyset up. Normally every employee receives their own login details that are only known to them to access the system. Additional hardware – a terminal for tracking time, for example – is not necessary. This helps save money that especially in the early founding phase is often better invested in other areas.
Most time tracker tools are user-friendly and easy to learn how to use. Currently, the selection is so large that you and your employees can try out different tools to find the most appropriate one for you and your company’s needs.
Most tools offer one of the three following options for tracking time. Some tools offer all of them.
- Manual tracking: The employee keeps track by hand of when they arrive or leave, take a break or how much time they have dedicated to specific projects.
- Timer mode: At the beginning of a work day or a new activity, the employee starts time tracking and finishes when they are done. Meanwhile, the tool automatically counts the time. Prefabricated entries for projects help to categorize the automatic entries.
- Automatic time tracking: The tool records throughout the workday which applications the employee uses and for how long. From this data it then creates an hours-worked profile. This of course only functions if employees mostly work at their computers. At the end of the day you can edit the automatically created entries before finally submitting them.
Quick generation of reports and analyses
The tracked working hours can be evaluated quickly and simply through online timekeeping tools. This ranges from a simple overview of whether an employee has accumulated overtime to a comprehensive report for management. An exact tracking of working hours also makes payroll accounting easier. The times that have been tracked can for the most part be exported as Excel files, CSVs, or PDFs. Often there also interfaces for accounting software that can be used to directly access the hours-worked data.
Premium features and interfaces
Many online timekeeping tools offer functions that go far beyond time tracking. Some examples:
- Invoice issuing
- Project management
- Integrated logbook
- Absence management
And even when they don’t offer these functions themselves, many applications can be connected with other programs via interfaces– for example,with accounting applications or project management apps such as Trello or Asana.
Tiered pricing system
You can vet most online tracking tools before you decide to pay for their use. You could give one a try with a 30-day trial phase, for example, or test a free version where some of the premium features aren’t made available to you. The range of functions for the basic version is relatively limited: it can potentially only be used by a low number of users or only allows fewer projects and customers to be set up.
If you decide on a comprehensive, fee-based rate, you pay for it with either a monthly or annual subscription. The rates are often tiered according to business size, so the more employees you have, the higher the rate. For startups, an inexpensive rate is usually completely adequate. Should the business grow and the demands increase, you can still switch to another rate later on.
Disadvantages of the online timekeeping system
As is the case for every timekeeping system, the tool is only as good as the people who operate it. If your employees don’t use it or don’t use it enough, then the online time tracker will not function properly. Yet many applications offer a remedy for this and regularly remind employees to track their working hours.
Resistance to online timekeeping is often the result of employees feeling as though they’re being monitored. To prevent this, it is important that you communicate the reasons for implementing online timekeeping. Create trust and explain to your employees that they themselves will also benefit from their working hours being correctly recorded. It is often wise to include the team in the selection of the online time tracker in order to allay any concerns.
Keep in mind as well that a tracking tool tracks the working hours, but not the quality of the work. If an employee requires more or less time for the same task as a colleague, it doesn’t reveal anything about the result of their efforts. You should keep this in mind especially when evaluating working hours.