Time And Attendance In The 21st Century

Recording time and attendance has been a vital part of business since the concept of the exchange of money for services was invented. Very little has changed, even if our use and understanding of that information has progressed.

While the early 21st Century was pretty much a natural extension of the 20th, albeit with rapid technological progress, the Covid era in which we now find ourselves has forced a seismic shift in the way we approach things as businesses, individuals, and as society as a whole.

What needs to change? How can we change it? And how can the technological advances of the pre-Covid era help?

In the first part of this two-part article, we’ll look at where time & attendance recording started and why it’s so important, before looking to the future in part two.

The Evolution Of Time & Attendance

The roots of the timesheet go back nearly 4000 years. In the year 1772 BC, Babylonian King Hammurabi signed the Code of Hamurabbi, a treatise setting a typical worker’s daily wage. Names were written down, along with the amounts paid which, according to the code worked out at six grains of silver per day.

Very little happened with timesheets for the next three-and-a-half millenia or so, save the transition from charcoal and papyrus to pencil and paper and the addition of a nice grid layout. That is, until we reach New York in 1890, when jeweller Willard Bundy patented the first mechanical time clock, or punch clock.

At around the same time, in the period surrounding the industrial revolution, led by the Chartist movement in Manchester and others like it in the 1800s, legal frameworks came in to play to ensure a fair day’s pay for a fair day’s work, leading to the creation of workers’ rights and the union system.

Timesheets were no longer just about what money was owed, but how long people were working.

The Working Time Directive

These laws around work and pay evolved continuously throughout the 20th Century, with the latest culminating in the late 90s and early 2000s as the European Working Time Directive (WTD). This legislation, amended in 2003, was created to prevent people from working excessively long hours.

According to a Gallup poll, in the USA the average employee works 47 hours per week, with 40% of employees regularly working a 50-hour week or more.

Of course, working more doesn’t always mean getting more done, and research showed that a third of full-time employees admitted to being productive for fewer than 30 hours per week. To compound the issue of long hours, the UK’s Health and Safety Executive (HSE) found that work-related stress accounted for 57% of days lost to ill health.

The WTD stipulates that no employee should work more than 48 hours per week, and that they are entitled to an 11-hour break every 24 hours – unless they choose to opt out.

In order to comply with the legislation, employers must keep accurate records of every employees working hours. In addition to the working week, the WTD also says that employees are entitled to a 20-minute break if the working day is longer than 6 hours, one day off each week, and that night workers should be limited to an average eight-hour working period in every 24.

The Current State Of Time & Attendance

For the better part of the last 150 years, time & attendance records have been created manually, with employees signing in at the beginning of their shift, and out at the end of it. These timesheets, and later punchcards, would then be collated with the hours totalled and wages calculated.

The digital revolution helped transform that system with the advent of digital card readers and keyfobs, allowing much of that information to be collated automatically.

Digitisation and the age of IT and the internet also made work more flexible. With the advent of personal computer, laptops, and smartphones, employees and contractors were always available which in turn has led to a growing problem of “presenteeism” in the workplace.

The notion of presenteeism isn’t a new one, the most obvious example being people turning up to work even though they were unwell. However, according to the Chartered Institute of Personal Development (CIPD), it has grown exponentially with the advent of modern technology. We are constantly connected which leads to an erosion of the distinction between work and home life. People are working longer hours than they perhaps realise, and these hours are going unrecorded.

European Rulings On Travel

In May 2019, the European Court ruled that companies in the EU must establish a system to record how many hours their employees work every day to make sure they could enforce legal limits on the working hours set in the 2003 mandate.

The ruling followed two major cases in Spain. In the first, a Spanish trade union asked for a ruling on the specifics required by Germany’s local branch of Deutsche Bank. The union believed the bank should be recording every employee’s specific working hours, when at the time they weren’t.

The second regarded a Spanish security firm which closed all its regional offices. As such, employees had no fixed place of employment and had to travel extensively to perform installations. The employees brought a case to the Court of Justice of the European Union (CJEU) arguing that time spent travelling to work should be counted as working time. The CJEU agreed with them.

Digitisation may have made the recording of time and attendance data quicker, and easier to collate thereafter, but it is still at the mercy of the employees’ honesty, and what it has failed to solve is the problem of time theft.

Time Theft

Time theft is a huge, but often hidden problem across virtually all industries, large and small. We want to trust our staff and maintain good relationships with them; happy employees are productive employees, of course. It’s safe to say, however, that since the concept of pay-for-time-spent was invented, people have abused that system either consciously or unconsciously. Leaving 10 minutes early here, a long break there – research from the British Heart Foundation showed that smoking breaks cost British business £8.4 billion annually in lost productivity. Getting a friend to cover your because you’re half-an-hour late – just because a card has been read, it doesn’t mean that the person scanning it was the person it’s registered to.

This “buddy punching”, or “buddy clocking” is one of the most common forms of time theft in business. Even with digital readers, most contractors still use a paper-based system to submit their hours, even if that “paper” has been superceded by an electronic invoice. It’s a very easy system to fiddle, with very little scope for catching someone in the act unless something else indicates there is a problem.

The Impact On Productivity, Morale, And The Bottom Line

While it may seem a relatively small thing, time theft can have a surprising impact on your business bottom line. One study showed that a company can lose up to 7% of its profits due to stolen time. That might not be enough to sink a company, but it’s nonetheless a sizable chunk of revenue.

Another study showed that an average employee steals up to 4.5 hours per week from their employer in lost productivity, perhaps through lateness, longer than necessary breaks or excess use of social media. The bigger the company, the more you lose.

As an example, the UK’s average hourly salary is £14.80. Assuming the average loss of hours, that’s just shy of £67 per week, per employee. If you multiply that for a company of 50, you could be losing £3,330 per week, or nearly £175,000 per 52-week fiscal year. Imagine what you could do with that money? Hire more staff? Invest in new technology or R&D? Scale up your marketing budget to increase sales?

It’s also worth mentioning that time theft doesn’t just mean lost productivity, it covers excess and unnecessary productivity, too. Overtime may well be justified in peak periods, but if people want more money, they will work more given the chance, whether the business needs that work done or not.

Another important note is the social, non-financial aspect of time theft. The impact of someone dropping out for an extra five minutes here and there can ripple across the workforce surrounding them. Imagine being the person at the next desk, or next station on the line, seeing someone who is consistently late, absent, or taking long breaks going home with the same money as you, when you’ve put the hours in?

It can lead to staff dissatisfaction, mistrust of their employers, and a dip in morale. Sometimes it’s not about not being paid enough, it’s about being paid fairly, and what’s fair about someone doing less work for the same money in the same job?

What Is The Future Of Time And Attendance?

The principles behind recording time and attendance have expanded, but not shifted. What once was simply a record of payment has evolved into a system to help maintain productivity and ensure workers are not exploited. It has been proven in Scandinavia and other countries that implementation of the EU legislation can be a very positive change. Employers save time and money, and employees can track their hours and ensure they are paid fairly for what they work. Many have said that when earning a fixed wage, the workplace becomes more equal, as it shows when a co-worker on the same salary does less work.

The system is far from perfect, however, with time theft remaining an issue and Covid-19 forcing us to examine everything we touch, from handrails to workstations, from timesheets to swipecards.

In the next part of this article we’ll look at how the system can be improved with something else that Hammurabi did 4000 years ago: biometrics.

[End Part I]

 

Contact the team at Almas Industries today to discuss biometric access control, biometric readers, or facial scanners for your business.