What is the Return on Investment (ROI)?
and attendance system, like any investments, should be
analyzed based on the return it provides for your
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
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:
Eliminate manual calculation errors
Reduce employee time theft.
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
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.
Total Benefits (h + k):
calculation of benefits do not include or
quantify the following items in this study:
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.
and accessible records for internal or
external audit, as well as time saved when