Time & labor management tools can provide crucial insights in regards to productivity, cost management and compliance. They can also assist you in the establishment of KPIs, or Key Performance Indicators for attendance within your organization. Having access to this information will enable you to make better decisions which are driven by data. The most important metrics to consider are overtime, labor costs, and absences.
Monitoring the costs related to overtime is essential. Not only will it help improve your labor budget, it is also a key component in preparing for future changes which are associated with the Fair Labor Standards Act. Heads of Human Resources and Finance should have a plan set in place that will allow them to handle the overtime eligibility of millions of workers. By tracking overtime now you will be given access to data that will allow you to forecast the impact of your labor costs. Tracking the number of hours that exempt employees work will help determine whether salaries should be increased or reclassified.
Labor costs are some of the biggest controllable expenses that an institution has. They tend to be complex, which means that knowing the true labor costs requires managers to carefully monitor unplanned absences, overtime and paid off time. These metrics are important because they significantly increase the usage of replacement labor. Once you have the needed data on hand and understand it you can then cut away spending which is unnecessary while simultaneously implementing better scheduling and optimized staffing.
Software for time and labor management will allow you to make a comparison between the actual hours which are worked versus the hours which are scheduled, which allows for better planning and reevaluating budgets.
Absenteeism is another important metric that time and labor systems can reveal, and managers can use the data to lower their costs while boosting productivity. However, dealing with absences will always be challenging for Human Resources. Many departments have difficulty understanding regulations related to compliance, while others find it difficult to efficiently administer leave for employees. When absenteeism occurs among hourly workers it immediately increases the use of overtime and will require high priced replacement labor.
Companies that utilize KPIs for the management of absences gain a number of benefits. HR heads will be able to lower the burden for middle managers and executives, and will have access to notifications which are automated so employees are made aware of when they are near their threshold. It also allows managers to determine the root causes of absences, whether they stem from illness, managerial problems, or the workplace environment.
Time and labor management is important for organizations of all sizes, but particularly for medium to large businesses that have hundreds or thousands of workers. This software gives you the ability to better control costs while increasing productivity. Many companies go further by benchmarking their firms against their competitors in order to discover deeper truths and opportunities which will allow for further improvement.