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 NOVAtime
 
Benefits of an Automated Time & Attendance System
NOVAtime - time and attendance workforce management software   
 

 
What is the Return on Investment (ROI)?
 
Automated time and attendance system, like any investments, should be analyzed based on the return it provides for your company.
 
ROI = Benefits - Costs
 
Calculating the return on investment will require you to quantify the costs of acquiring and implementing automated time and attendance system versus the tangible and intangible benefits it offers.
 
Lower cost systems may or may not have as many features (and therefore as many benefits) as a higher cost system. You also need to evaluate if your company needs all the features provided in a higher cost system.
 
Knowing what you're trying to achieve benefit-wise up front will allow you to monitor your actual progress and calculate your ROI more accurately. If the expected savings are not being achieved, you can analyze the cause and take corrective actions.


Quantifying the Benefits of an Automated Time & Attendance System
 
Although the benefits are usually easy to spot, figuring out the dollar value is not so easy. You normally have to make some assumptions. The following factors are used to quantify the benefits:

  1. Eliminate manual calculation errors

  2. Reduce employee time theft.

Return on Investment (ROI) Calculator
 
Enter your parameters:
     
a. Number of Employees:  
b. Hourly Employees' Average Wage:   $
c. Number of Hours in a Work Week:   hours
d. Number of Work Weeks Per Year:   weeks
e. Employee Time Theft Per Day:   minutes
f. Error Rate:   %
     
   

(1) Benefits in eliminating manual human calculation errors

 
Eliminate manual human calculation errors:
Manual processes and calculations are error prone, plus every manager has their favorites. According to a study done by the American Payroll Association (APA) and Robert Half, they estimate that automation can save 1% to 8% of your yearly payroll costs. Use 3% as an error rate:
 

g. Annual Gross Payroll: (a*b*c*d)   $
h. Annual Savings: (f*g)  $

(2) Reduce Employee Time Theft

 
Employee "Time Theft" is loss of work hours due to employees clocking in and out of schedule, taking long breaks and lunches, as well as punching in and out for each other that can be monitored and eliminated by an automated Time & Attendance system. According to a study done by the American Payroll Association (APA) and Robert Half Association, about 10 minutes a day is lost due to this factor. That's 41 hours a year per employee.
 

i. Minutes Lost Per Day    minutes
j. Time Saved Per Year:
(a*d*i*5 days/week)
   hours
k. Annual Savings: (b*j)  $

(3) Total Benefits
 

Total Benefits (h + k): 

 $


Above calculation of benefits do not include or quantify the following items in this study:

  1. Work hours versus time wasted
    * Today using bar code, proximity (RFID) or biometric data collection devices / time clocks, an employee can identify themselves to a system in seconds, quicker than finding a paper time card in a rack and positioning a timecard to a punch device.
    * No one needs to figure if the IN / OUT time was within a grace period or round it. No one needs to determine if it is early or late. No one needs to add or repunch it.
    * Time saved for payroll interface automation.

  2. Keep accurate and accessible records for internal or external audit, as well as time saved when auditing timecards.

 

 
            NOVAtime - Time and Attendance Software
 
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