Many components factor into an analysis of return on investment of a time and labor solution. The following sections describe six key components.

1. The Reduction of Payroll Errors

Organizations usually receive the largest cost savings from a reduction of payroll errors. Because labor is often the biggest expense item in an organization, it may represent 40 to 50 percent of its costs.

While the money wasted on payroll errors is significant, the potential for even more waste is ever present. Pay calculations are complex and federal pay rules, union contracts, and state regulations increase that complexity exponentially. The best strategy is one of prevention by automation.

Payroll errors due to incorrect time collection and improperly applied rules and regulations are eliminated by the WorkForce Software Time and Labor system. There are a variety of factors which impact the exact benefits obtained. Larger employers, ones that are more decentralized, and the ones with more complex policies tend to have most errors. Also those employers that have substantial variation in employee time worked from week to week have higher errors. Conversely, those employers with some type of automated system in place today obtain smaller benefits as some of their rules are already automated.

2. Automated Data Collection / Elimination of Data Entry

Another key component of ROI analysis is the processing time and resources used to collect employee work data and enter it into a system. Shortening this processing interval and freeing people’s time for use on more productive tasks can produce significant savings.

The WorkForce Software system transforms the entire time and labor data collection process; employees no longer punch paper cards, supervisors have visibility to pay periods before the close, and calculations are done as the time data is collected instead of after the fact.

A WorkForce Software customer with 2,000 employees was able to reduce the size of their payroll staff from eight employees to just two by automating the time reporting process. Further savings were obtained through the elimination of duplicate entry and the maintenance of multiple homegrown systems.

3. Leave Time Management

Leave time includes paid time off, sick time, vacation time and holidays. Most employers provide between two and four weeks of leave time off per year. By using the WorkForce Software system, leave time is controlled more efficiently.

Many organizations still track leave time manually. In fact, a large WorkForce Software customer in the mining business had hundreds of managers using spreadsheets tracking time off for 4,000 employees. Once the WorkForce Software system was in place, however, leave time for all employees was automatically tracked, which resulted in more productive managers and dramatically increased data accuracy.

Industry studies have shown that employees take an average of one extra unrecorded day of leave per year. Without a system to automatically validate accrued time off, it is very difficult to prevent this.

4. Retroactive Calculations

When new information comes to light after a pay period has been closed and checks issued, an organization may still need to go back to that pay period and make an adjustment to an amount. When this happens, all the periods that followed that adjustment will also be affected.

This scenario is more common when the process is largely manual, however even organizations that have automated portions of the process may have a need to retro-actively correct pay data. Here are some examples that require corrections to prior periods:

• Employee or time entry person simply keys a figure incorrectly into the system.
• Employee fails to punch in/out for the day when they came in after hours on a call-in.
• An absence is not reported for a salaried employee. Payroll is not affected, but their banks need to be adjusted.
• A union contract is renegotiated retroactive to the beginning of the year
• An employee was moved from position A to position B. The paperwork in the HR department was entered after the employee was paid by payroll. Therefore the employee was paid at their old rate and under the rules for position A.
• An employee reported a sick day, but sometime later, the occurrence was investigated and found to be a Family Medical Leave Act (FMLA) event.

Of the leading time and labor management solutions on the market, only the WorkForce Software system solves this problem correctly by facilitating the correction to the time period in question, and then rippling that change through all the time periods that follow it. This prevents the error from being carried forward through every period and it also provides an audit trail for regulatory compliance.

All relevant information is automatically corrected, including labor hours, accrual balances, and pay. If changes were made in HR that affect timecards retroactively, these are automatically detected and corrected as well. Because these error corrections are done automatically, an organization that uses the WorkForce Software system usually recognizes a 5-10 percent improvement in productivity in the payroll and HR departments.

5. Self-Service Functionality

By providing employees with secure systems that enable them to manage their personal information and request paid time off, the workloads of the human resource or payroll departments are decreased. This reduction in resource is another key factor in the return an organization will get by automating its time and labor processes. The following are some employee self-service functions that can be accessed via standard web browsers:

• Up-to-the-minute time off balances for inquiries .
• Inquiries on time worked and absences
• Schedule access
• Time-off requests (which are then routed to managers for approval)

These self-service functions reduce overhead costs in human resource and payroll departments.

6. Eliminating Payroll “Inflation”

Payroll “inflation” occurs when employees report inaccurate information on their timecards. Even when done unintentionally, the time may be rounded-up in favor of the employee. For example, an employee may arrive at 8:05 am, but mark the arrival time as 8:00 am. When accumulated across a large workforce, these “lost” minutes may represent hundreds of hours and tens of thousands of dollars every pay period for even smaller employers.

Experience shows that an average time inflation error amounts to 6 minutes per day, or 30 minutes per week. Imagine the benefits of getting another ½ hour of productive time from every one of your employees every week.