How Much Will A Time And Attendance System Cost? Pricing For Employers
If you’re like most employers, you’ve experienced some frustration when accounting for the number of hours worked by your staff. What should be a simple process is actually one filled with inaccuracy and inefficiency, lending credence to the phrase: time is money.
Capturing an employee’s work time correctly is critical to properly running any businesses. While you may rely on a paper-based timekeeping system to track hours, since accuracy is so important, many businesses – over 50% — look to technology to help.
Today, there are numerous options available that go beyond handwritten timecards or stand-alone clocks, like web portals and mobile device options. But while you may suspect that your current approach doesn’t cut it anymore, you may be equally suspicious about what it may cost to replace an outdated system.
Complete Payroll Solutions is a time and attendance solution provider that offers state-of-the-art systems for efficiently collecting and processing time-tracking data. While that may appear to make us a little biased, we hope to be a resource in your research since we also know how these solutions are priced in the market. Cost can vary dramatically, but you can generally expect to pay between $2 and $10 per employee per month for basic time and attendance systems.
In this article, we’ll break down these costs in terms of:
- What’s typically included
- Extras that may drive up the price
- Ways to save on a system
After reading this article, you’ll know if an automated time and attendance system is an investment you can afford.
What is a Time and Attendance System?
In its most basic form, a time and attendance system allows your employees to record their in and out times while at work.. They may be very simple like paper timecards, mechanical clocks or other manual methods for collecting data. Ultimately, they can graduate from being just a data collection system to a more advanced automated workforce management solution that also allows you to do additional tasks like manage time-off data, schedule workers, and so on. These newer electronic systems are normally web or mobile solutions that offer companies several distinct benefits, which we’ll discuss next.
What Are the Benefits of an Automated Time and Attendance System?
An automated time and attendance system delivers several key advantages over a traditional manual method for companies of all sizes, including:
Automated systems minimize or eliminate the errors employees may routinely commit. That could be either when recording their time by hand or when administrators make errors when adding up the details.
HR professionals in the US spend 13.6% of their time maintaining employee records. A time and attendance system reduces the amount of time that managers and administrators need to spend adding up employee time cards. With streamlined processes, your team is free to focus on more strategic tasks.
The newer digital systems aid in compliance in three key ways:
- Reinforce HR standards and ensure that policies are consistently applied and enforced, which protects your company
- Make record storage and retrieval easier in case of a Wage and Hour dispute over compensation
- Ensure proper hours calculations that are required for tracking and reporting under the Affordable Care Act
An estimated 82 million workers have experienced a paycheck error, and that can strain the employer-employee relationship. In fact, according to a study, 49 percent of American workers will search for a new job after experiencing just two paycheck issues. Since an automated system boosts accuracy, it can positively affect satisfaction and retention.
Direct Cost Savings
A properly implemented system can generate direct savings:
- Multiple studies have shown that companies who manually tally timesheets to process payroll have error rates from .5 to 2%. This error rate exists with employers of all sizes. Consider the following examples (all assume full-time employees, 40 hours per week, and 50 working weeks):
- If you have 20 employees at $15 per hour per employee, and a .5% error rate, that’s $3,000 a year in mistakes
- If you have 200 employees at an average cost of $20 per hour, per employee, and a .5% error rate, that’s $40,000 a year in mistakes.
- Time and attendance systems eliminate what’s known as buddy punching, when an employee asks a fellow worker to make a punch for them
- An automated platform removes the fudge factor that can happen with written timecards when employees take long lunches or leave early and game the system.
By eliminating all of these issues, the savings realized with a solution often pay for, or significantly offset, the cost associated with deploying a time and attendance system, which we’ll explore next.
How Much Does a Time and Attendance System Cost?
When it comes to time and attendance systems, you can expect to pay for a number of services. These might include:
- A basic monthly employee (per employee per month) maintenance cost, which generally runs between $2 and $10.
- An implementation fee to set up your account. These can be in the form of a flat fee, a fee based on the number of employees, or a percentage of the overall value of the contract. Depending on size and complexity of the account, the cost can range from $1,000 to tens of thousands of dollars.
- The cost of physical clocks, which are a one-time, upfront expense. These can be as low as a couple hundred dollars for a very basic electronic clock to multiple thousands of dollars for very sophisticated devices with biometric validation capabilities.
- Time cards or fobs. Typically, these range per card from $2 for basic functions to $10+ for a card with features like embedded employee identification or photo or one that works with multiple systems in addition to time and attendance such as security or door access.
- Warranties. Warranties that cover a basic period are often included in the cost of a clock. However, optional extended warranties should be considered because many of today’s data collection units are very advanced electronic devices that are expensive to repair and replace. An extended warranty will cost $200 to $300 per year per device but can be well worth the investment.
- Extra services such as scheduling, time off requesting and accruals tracking and reporting, which we’ll cover next.
What Additional Factors Can Drive up the Cost of a Time and Attendance System?
Various factors can affect the cost of time and attendance services beyond the basic pricing.
Providers charge differently but you may find that the number of administrators who have access — or licenses — could drive up the costs. Some providers will allow unlimited licensees while others may have a limit on the number of included administrators and charge a fee for each additional user.
Also, as you expand, you’ll often want to take advantage of more sophisticated services that can be integrated into a time and attendance system such as:
- Time off requests
- Absence and leave tracking
- Accrual balances
- Mobile phone and geo-tracking and fencing solutions
For each of these extras, a cost of $1 per employee, per month for each service is fairly common.
How Can I Save on a Time and Attendance System?
Even though you may think more advanced solutions would be more expensive, oftentimes, you can realize savings by taking advantage of their functionality. For example, you can avoid the investment in physical clocks if you consider web-based or mobile punching instead.
You may also lower the costs for your time and attendance system if you integrate your other business or HR solutions with one provider. For example, by choosing the same provider to handle your payroll and time and attendance you can save big money. At Complete Payroll Solutions, our clients see a 20% to 40% discount by bundling services over standalone pricing for a time and attendance system.
OK, So What Will A Time and Attendance System Cost Me?
The simple answer? It’s surprisingly affordable. Especially when you consider what an outdated time and attendance method could be costing your organization in lost productivity, time theft and noncompliance. For a basic time and attendance system, you can generally expect to pay between $2 and $10 per employee per month.
These costs can vary widely depending on the provider, so it pays to shop around. There are lots of choices out there for time and attendance systems. As you’re evaluating options, we thought we’d tell you who Complete Payroll Solutions is a good fit for. We make an ideal partner if your company wants to:
- Have minimal IT requirements. All of our solutions are web-based so there’s little to no infrastructure required that needs to be supported.
- Deploy quickly. A typical deployment ranges from three to 10 weeks depending on the needs and complexity of the client.
- Pay only for what you use. You pay only for those employees who are active in the system. For example, if you run a home health care business, you may have many employees who are part time and don’t work regularly so you’d only be charged for those employees with system activity in that month.
- Have a low upfront investment. A combination of clock and financing options allow us to find the lowest priced solution to fit your needs. For instance, there’s no charge for a web or mobile clock and we have purchase and leasing options for physical clocks for every budget.
If this sounds like you, visit our pricing page to learn how much it will cost to more efficiently collect and process employee time-tracking data.