Running Your Business

Creating an Employee Time Tracking Policy? Consider These Pros and Cons


  • Time tracking can fix billing inaccuracies and automate mundane tasks

  • Using it to micromanage your employees can create an environment of distrust

  • Before adopting it, consider how time tracking can improve operations, and welcome feedback

Posted by January 7, 2020

For businesses that work with a slew of clients across state lines, time tracking can simplify billing and eliminate any confusion over how long certain tasks take. But asking your staff to account for every hour of their day doesn’t always receive an enthusiastic response.

Nonetheless, employee time tracking can help businesses price services and evaluate productivity. Before instituting this policy, it’s worthwhile to consider the pros and cons as well as how it could affect your larger company culture.

Why Do Businesses Use Time Tracking?

If a company bills clients hourly, it’s important for them to have accurate assessments of the time spent on projects, whether it’s email, chat and phone communication or meetings and production tasks. If these records aren’t precise, it can hurt business relationships and paint an unrealistic portrait of your operations.

But when employees are switching from project to project and app to app, it can be easy for time tracking to get muddied. Other employees may wait and fill out their timesheets at the end of the week, which only increases costly inaccuracies. Time-tracking software can simplify this task, but it’s only effective if your staff uses it consistently.

The Pros of Employee Time Tracking

The nature of a business will typically dictate whether it can benefit from time tracking. A law firm, for example, must track billable hours closely. But a company that charges simply by project completion might not need the same degree of tracking.

Time tracking can be good for legal purposes, since it keeps a detailed paper trail that businesses can fall back on in the event of a lawsuit or billing question. It can be a good safety feature too, alerting employers if someone routinely takes a long lunch.

By automating timesheet and billing functions, time tracking allows employees to spend less time on mundane tasks. It can also protect employees who are paid hourly from working overtime without fair compensation.

The Cons of Employee Time Tracking

Some employees might feel that time tracking is just another way of monitoring them. They may also feel that introducing time tracking software is a sign of distrust. This can increase stress, worries about layoffs, and even turnover. The more intrusive the software becomes on an employee’s daily life, the more likely it is to hurt morale.

But that may also have to do with time tracking’s bad reputation as of late. Amazon’s time tracking technology, for example, has led to 10% of its staff being fired over productivity concerns. Amazon’s system is so stressful, according to The Verge, that some warehouse employees avoid bathroom breaks.

Some experts feel that the cost of time tracking—from the software, monitoring the data, and productivity shifts should employees be against it—may be greater than any potential gains. “People work a whole lot harder when they feel like they’re being treated well and respected,” one employer told Utah Business.

How to Implement Time Tracking at Your Business

If you decide to adopt time tracking at your company, make sure your employees feel comfortable and understand the intentions behind it.

For starters, don’t use the time-tracking data to question small things like employees’ phone calls, showing up five minutes late or taking short breaks. Instead, use time-tracking tools to identify sources of bigger time sucks, such as unnecessary meetings or subpar technology. Focus on improving productivity without questioning every minute of the day.

Roll out employee time tracking gradually while listening to their feedback. Explain how the tool can make their lives easier, such as by automating invoices. If you can tangibly use the tracking software to make genuine improvements in employees’ lives, you can build trust over time. Eventually, your employees may even consider the tool to be a helpful resource they’ve come to rely on.

Looking for resources to further streamline your operations? Explore these articles on running your business hosted on United Concordia Dental’s Benefits Bridge.

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