What is Employee Time Tracking Software?

No matter your industry, streamlining operations, reducing administrative burden, and keeping labor costs in check will always be a priority.

Employee time tracking software can minimize these concerns by automating time collection and payroll calculations, making it faster, easier, and more accurate. Due to increasingly complex regulations, traditional timekeeping methods, such as paper timecards or spreadsheets, have become less reliable.

With robust time tracking software, your organization can control labor costs, enhance employee satisfaction, and make informed strategic decisions. This guide explores the role of time tracking software in organizations, the challenges of outdated methods, and the essential features to consider when selecting the right time tracking solution.

What is employee time tracking software?

Employee time tracking software is a specialized digital tool for automating time collection and payroll rule calculations.

These features allow organizations to create, implement, and manage streamlined timekeeping systems. Employees can then receive accurate pay and eliminate manual processes that often lead to costly inaccuracies, inefficiencies, and compliance risks.

While the functionality of time tracking systems varies across different platforms, they typically include features like:

Clock-in/clock-out functionality
Timesheet approvals
Overtime tracking
Payroll and project management systems integrations

Understanding the key features of these systems will help you find one that aligns with your organization’s employee time tracking requirements and refines its performance and accuracy. Before diving into each feature, it’s worthwhile to understand how time tracking software differs from traditional timekeeping.

How time tracking software differs from traditional timekeeping

Both time tracking software and traditional timekeeping methods help organizations manage work hours and attendance, but they differ in functionality, accuracy, and efficiency. Here are a few core differences:

Automation vs. manual processes – Time tracking software automates data collection, while traditional timekeeping relies on manual input methods like punch cards or online timesheets.
Real-time data vs. delayed records – Digital solutions provide real-time insights, whereas traditional methods only capture past records.
Advanced reporting vs. basic logs – Software offers detailed reports and analytics, while traditional timekeeping is limited to hours worked.
Scalability and remote work support – Time tracking software supports distributed teams, while traditional methods are best for in-office staff.

Essential features of employee time tracking software

When searching for employee time tracking software, organizations should look for several core functionalities that simplify workforce management as a whole. Here are the key features to consider:

Automated time collection

One of the most critical functions of time tracking is time capture or collecting data on employees’ working hours. The ideal time tracking system will offer flexible and adaptable time clock solutions to suit various work environments and employee needs. Rather than using paper cards, employees may clock in and out through:

Wall terminals or digital kiosks – These terminals, with a touchscreen or keypad, offer straightforward, on-site time capture.
Mobile apps – Ideal for field teams or traveling employees, mobile time capture allows clock-ins from any location. Often, the app includes geolocation or geofencing capabilities to confirm the employee’s whereabouts.
Web-based portals – Enables employees working from a computer to clock in instantly.
Biometric devices – Fingerprint or handprint scanners help reduce buddy punching and guarantee in/out times are legitimate.

Overtime tracking

Tracking overtime accurately is a critical feature of employee timekeeping software. Not only does this help keep labor budgets in check, but it also enables compliance with various federal, state, and local regulations. Here are some examples of overtime calculations your time tracking solution should have the capacity to handle:

Overtime thresholds – Overtime calculations vary by organization, and a single organization may require multiple overtime rules, such as hourly, daily, or weekly.
Weighted/blended overtime – When employees have different overtime pay rates for various roles within an organization, their employer must calculate their average pay rate to determine their weighted overtime pay or the amount they receive when they work overtime hours in any role.
Compensatory (comp) time – Some organizations allow employees to choose between overtime and comp time or paid time off at 1.5 times their regular pay rate in the public sector.
Variable overtime – When employees work fluctuating hours, their overtime is calculated by dividing their annual salary by the number of hours worked to obtain a regular pay rate.

Exception management

Real-time alerts for anomalies like missed punches, extended breaks, or late clock-ins empower managers to correct issues quickly rather than wait until the end of a pay cycle. Exception management also reduces the bottleneck for payroll — if corrections happen daily or weekly, there’s less chaos at the close of the pay period.

Pay and compliance calculations

Employers have different payroll and compliance rules, and some are quite complex. Many timekeeping platforms can’t accommodate these nuanced policies, making it difficult for organizations to manage their employee timekeeping processes accurately.

The right employee time tracking software should adeptly manage intricate company policies, labor compliance, and union rules, ensuring that all wage and hour calculations are precise and compliant. Examples of these complexities include:

Paid breaks and meal breaks – Organizations that offer their employees paid breaks or meal breaks must calculate the employees’ breaks into their pay.
Pay rates by position – Employees in multiple roles may receive a different pay rate for each position.
Shift differentials – Some institutions offer employees shift differential pay for working non-standard days or hours, such as nights, weekends, or holidays.
Different overtime rules and periods – Some organizations have employees with varying overtime requirements based on factors like their job type, salary, and union rules.
Supplemental pay – Employees may receive supplemental income besides their base salary, such as commission or bonuses.

Digital timesheets

For most organizations, the accuracy of time clocks makes them the ideal choice for employee time tracking. However, organizations in specific industries — particularly those in the public sector — sometimes prefer to use time tracking spreadsheets instead of time clocks.

In this case, using timekeeping software that supports electronic spreadsheets is still critical. While they’re prone to human error and require staff to complete tedious, time-consuming tasks, their digitized counterparts automate the process for increased accuracy and optimal efficiency.

Integration with payroll and other systems

Isolating time tracking from payroll and human resources management can create duplicate data entries, resulting in inconsistent records. Ideally, your time tracking solution should integrate seamlessly with your existing systems or any you plan to adopt.

This confirms accurate wage and hour data flows from the employee clock-in to the paycheck, encompassing leave management solutions, scheduling, and more.

Reporting and analytics

Modern managers need insights at their fingertips to make quick decisions. Real-time dashboards and analytics tools help identify employees nearing overtime limits, track attendance trends, pinpoint inefficiencies, and gauge overall productivity. By catching patterns early, decision-makers can proactively adjust schedules, control costs, or address attendance issues.

Inclusion in a broader time and attendance ecosystem

Time tracking shouldn’t operate in a silo. For maximum efficiency, it should be part of a comprehensive time and attendance system, complete with:

Leave management – Automates the approval and tracking of leave management like paid time off, sick leave, and vacation accruals.
Job costing/labor tracking – The organization can see how much each task or project truly costs.
Workforce management – Encompasses scheduling, forecasting, compliance, and analytics across the labor force.

Benefits of employee time tracking software

Switching from paper processes to time tracking software yields a variety of advantages that ultimately strengthen your organization’s bottom line and employee experience. Here are the six key benefits of employee time tracking software:

Minimize data entry errors
Increase productivity
Avoid payroll delays
Better labor budget management
Compliance with labor laws
Improved employee experience

Understanding these benefits and the basics of time and attendance tracking software is essential for choosing a solution that aligns with your company’s and its workers’ needs. The right time tracking system can transform your organizational operations and employee experiences.

Benefit 1: Improve accuracy by minimizing data entry errors

Automated time and attendance tracking software minimizes the risk of human error, ensuring that time records are accurate and reliable. This precision contributes to payroll accuracy, preventing compliance issues and building trust and satisfaction among employees who expect their paychecks to be correct.

Benefit 2: Time savings for maximizing productivity

Manual processes often require employees, managers, and payroll staff to spend several hours per pay period on tasks like collecting time cards, resolving inconsistencies, or emailing reminders. A digital solution with employee attendance tracking software automates these steps and allows employees, managers, and payroll directors to focus on more strategic tasks.

For instance, time tracking software removes the need for paper timesheets and the complicated clock-in and clock-out processes. Managers can easily collect, approve timesheets, avoid handling weeks-old exceptions. Speaking of payroll, directors no longer need to send email reminders about timesheet due dates, overdue timesheets, and exceptions managers need to resolve to ensure employees receive accurate pay.

By alleviating the burden of manual timekeeping, your employees will feel more empowered to use their time to focus on excelling in their roles and contributing to the success of the organization.

Benefit 3: Avoid payroll delays

Real-time reporting in time tracking solutions grant immediate visibility into hours worked and potential exceptions. The right employee attendance tracking software for your organization should support proactive overtime management, real-time decision making, and make your workflows more efficient.

Proactive overtime management – If an employee nears overtime, real-time reporting will notify management that they’ll be in overtime soon if they work more than a certain number of additional hours that week.
Real-time decision-making for leaders – If something occurs that managers need to handle immediately, such as an employee clocking in late, real-time reporting allows them to find out in the moment instead of after the fact — or not at all.
Payroll efficiencies – Real-time reporting and notifications help time tracking workflows run smoothly. For example, employees and managers can review and approve hours digitally to verify they are correct and ready for payroll. Managers can authorize exceptions as they happen, and payroll leaders have visibility into any exceptions to prevent payroll errors before they happen.

Benefit 4: Labor budget management

With real-time visibility into hours worked, managers can more effectively plan schedules and prevent overtime overages. When employees approach overtime thresholds, an automated notification allows leadership to reallocate tasks, reduce hours, or request additional approval as needed.

This control over labor costs leads to greater financial efficiency.

Benefit 5: Maintaining compliance with labor laws

Accurate, automated time tracking is pivotal in adhering to wage and hour regulations. With the unique break, overtime, and compensation rules put in place by different states, provinces, or countries, even one slip with labor compliance can result in penalties and harm your organization’s reputation.

A rules-based engine that automatically applies the correct laws or union contracts dramatically minimizes the potential for errors.

Benefit 6: Improved employee experience

Employees who see their hours, leave, and pay details in real time gain confidence in the system’s fairness. Many time tracking solutions include self-service access, letting staff review their hours and submit corrections if needed. Additionally, being able to seamlessly request and track PTO makes both managers’ and employees’ lives easier.

A user-friendly system that respects employees’ time by making clock-ins and clock-outs simple demonstrates that the organization values its workforce. Streamlined processes also reduce frustration from missing hours, incorrect paychecks, or unrecorded breaks, which can improve retention and morale.

How to choose the best time tracking software

Choosing the right employee time tracking software can make a crucial difference in your organization’s operations. Below are some things to consider as your organization navigates the selection process to ensure a smooth rollout.

Identify your organization’s unique needs

No single software is perfect for all organizations. To avoid buyer’s remorse, first outline what you want to achieve:

Do you need a mobile-first system for employees in the field?
Are you managing complex overtime rules or union regulations?
Do you have remote workers requiring web-based clock-ins?
How important is the integration of a leave management system for your day-to-day operations?

By clarifying your requirements, you can narrow down solutions that check the right boxes.

Look for configurable, scalable software

Your organization may grow or change in the future. The best systems allow for expansions in scope, such as adding new locations or departmental structures. Seek vendors that let you configure pay rates, overtime policies, shift differentials, or specialized pay rules without extensive custom coding.

Evaluate integration capabilities

Pay special attention to how the software communicates with your existing systems — especially payroll. If the solution doesn’t integrate directly, you may face data silos that lead to redundant data entry or inconsistent records. Integration with employee scheduling, leave management, and other solutions is also essential for maximizing efficiency.

Consider employee self-service

One of the fastest ways to improve engagement is by allowing employees to take ownership of their time data. An ideal platform offers:

24/7 access that lets employees view and validate hours, request leave, or check schedules anytime.
Mobile access for employees who are partially or fully mobile.
Notifications to alert employees for missed punches, timesheet approval deadlines, or overtime thresholds.

When employees can easily see and manage their hours, they’re less likely to feel disconnected from payroll processes and more likely to trust the system.

Pilot the system

Test the software with a smaller team or department before rolling it out across the entire organization. The pilot phase allows you to catch technical hiccups, refine policies, and gather feedback from employees and supervisors — successful pilots build confidence in the system and create internal advocates who can help train others.

Time tracking software is only as effective as the users’ daily interactions. Proper training establishes that employees know how to clock in and request leave, while managers learn how to review, approve, and correct timesheets. Additionally, training materials should be accessible for new hires and for reference when software updates are introduced.

Elevate your time tracking software with TCP

Employee time tracking plays a pivotal role in every organization. Each minute of labor impacts your operational success, from hourly employees clocking in at a warehouse to knowledge workers signing in remotely. Traditional methods like paper time cards have grown increasingly outdated with complex labor regulations, remote workforces, and rising employee expectations.

Modern time tracking tools automate tasks, reduces compliance risks, and provides real-time insights that empower proactive decision-making. As you evaluate the next generation of time and attendance tracking software, focus on flexibility, scalability, and seamless integrations.

Consider how various features like mobile and web-based clocking to biometric or badge-based in/out systems could serve your unique workforce. Also, look for a vendor or solution partner who can guide you through implementation, training, and ongoing support, ensuring that your organization fully harnesses the advantages of time tracking automation.

TCP Software’s employee scheduling and time and attendance solutions have the flexibility and scalability to suit your organization and employees now and as you grow. 

From TimeClock Plus, which automates even the most complex payroll calculations and leave management requests, to Humanity Schedule for dynamic employee scheduling that saves you time and money, we have everything you need to meet your organization’s needs, no matter how unique. Plus, with Aladtec, we offer 24/7 public safety scheduling solutions for your hometown heroes.

Ready to learn how TCP Software takes the pain out of employee scheduling and time tracking? Speak with an expert today.

Everything You Need to Know About Employee Time Tracking Software