Employee Time Tracking: The Complete Guide

Employee Time Tracking: The Complete Guide

Unlock the Secrets to Successful Employee Time Tracking.
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In today's fast-paced work environment, mastering employee time tracking is crucial. Efficient tracking is key to managing a productive workday, yet only 17% of people actively track their time.

The importance of this practice is increasingly recognized by businesses. In response to the recent shift towards remote work, especially due to the COVID-19 pandemic, about 14% of companies have increased their investment in time-tracking tools.

Efficiently tracking the hours of hourly employees, moving beyond traditional spreadsheets, and optimizing every workday is now key to staying competitive. This guide delves into the essential strategies and tools for effective time tracking, setting the stage for a more organized, transparent, and productive workplace.

What Is Time Tracking?

Time tracking is a systematic process for recording and analyzing how time is spent within a company. It's more than just clocking in and out; it’s about understanding what employees do during their work hours. This method is essential for businesses across various sectors, be it landscaping, digital agencies, software development, or construction. Time tracking serves multiple purposes:

  • Recording Work Hours: It’s crucial for creating client invoices and paying hourly staff or freelancers.
  • Productivity and Project Management: By tracking time spent on different tasks, employees and managers gain valuable insights, helping them allocate time more effectively.
  • Cost Control and Analysis: For salaried employees, time tracking helps manage project costs and estimate future job expenses.
  • Comprehensive Data Management: As the number of employees grows, managing time data becomes more complex, involving tax laws, payroll, overtime, and other variables.

Whether it's the basic clock-in/clock-out system or detailed task-specific tracking, time tracking is integral to managing a workforce efficiently. In the upcoming sections, we'll explore how to streamline this process to make it as effective and efficient as possible for all team members.

Tip: Using an time clock can save you time on payroll by automatically collecting all the necessary information,and eliminating the need for manual tasks like gathering time cards.

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The Role of Time in Business Efficiency

Effective time tracking is pivotal in enhancing business efficiency, especially in environments with hourly jobs. Consider a retail store: by tracking employee hours, management can identify peak shopping times and allocate staff accordingly. This ensures optimal customer service during busy periods and reduces unnecessary staffing during slower times. Such strategic planning, driven by precise time tracking, leads to improved productivity and operational efficiency.

Benefits of Effective Time Tracking:

Implementing time tracking in a business can lead to numerous benefits that extend across various aspects of operations. These advantages not only streamline management practices but also enhance the overall productivity of employees. Here are some key benefits.

  • Boosting Business Profitability: Time tracking lets businesses see exactly where money is spent, making it easier to adjust projects for better profitability. This leads to smarter spending and increased earnings.
  • Ensuring Accurate Billing and Payroll: With time tracking, companies can bill clients precisely for the work done. It also ensures employees are paid fairly for their time, avoiding over or underpayment.
  • Setting Clear Objectives for Teams: Time tracking helps teams understand their tasks better, aligning everyone's efforts toward clear, shared goals. This clarity helps in reducing confusion and enhancing focus.
  • Enhancing Overall Workplace Productivity: By monitoring tasks with time tracking software, businesses can spot where time is wasted. This allows for adjustments that lead to more efficient workdays and higher productivity.
  • Improving Efficiency in Project Management: Time tracking provides insights into how long tasks take, helping managers plan and prioritize future projects more effectively and allocate team resources efficiently.
  • Fostering Transparency in Team Operations: Implementing time tracking promotes openness in team activities. It gives a clear picture of how everyone's time is spent, enabling managers to assess workloads and performance more accurately. This transparency builds trust and helps in making informed decisions about team operations.
  • Improving Team Communication and Progress Updates: As employees track their time, they can better communicate their ability to meet deadlines. This improves planning and allows teams to adjust workloads as needed.

Challenges in Tracking Time

Implementing a time tracking system comes with its set of challenges. Successfully overcoming these hurdles is essential for the system's effectiveness for both employees and management.

  • Employee Resistance: Some team members might see time tracking as excessive oversight. To address this, it’s important to communicate the benefits and maintain transparency about the usage of data.
  • Data Accuracy: Ensuring that time entries are accurate is vital. Regular training sessions and employing automated time tracking tools can significantly improve accuracy.
  • Technical Issues: Technical problems can disrupt effective time tracking. Choosing reliable software and providing strong IT support is key to mitigating these issues.
  • Adapting to New Systems: Shifting to a new time tracking method can be challenging. Thorough training and a reasonable adjustment period can ease this transition.

The Importance of Accurate Employee Hours

Accurate time tracking is crucial for fair employee treatment. It ensures that each person is paid for the exact hours they work, preventing anyone from bending the system to their advantage. When time is recorded properly, it addresses issues like extended breaks or inaccurate hour logging.

This fairness in tracking not only maintains employee satisfaction but also protects them from unintentional overtime, which can lead to burnout. Employees who feel their time is valued and fairly compensated are more likely to be motivated and committed to their work. Accurate time tracking, therefore, plays a key role in fostering a positive and equitable work environment.

However, time tracking is not just about managing work hours and productivity; it's also about legal compliance. Understanding and following labor laws is a critical aspect of employee time tracking.

The Fair Labor Standards Act (FLSA) and various state laws mandate detailed record-keeping for hourly employees. These laws require accurate tracking of hours worked per day and week, including overtime.

For example, under FLSA, a business in Texas must record all hours worked by hourly employees and pay overtime at one and a half times the regular rate for hours exceeding 40 in a workweek. Meanwhile, California law requires overtime pay for hours worked beyond 8 in a day and double pay for hours worked beyond 12.

Non-compliance can lead to lawsuits and substantial financial penalties, including unpaid wages with interest and legal fees.

Exploring Various Time Tracking Methods

Choosing the right time tracking method is pivotal for any business. This section offers a comparison of different approaches, from traditional manual systems to modern digital solutions. We'll examine how each method aligns with various business requirements and work environments, providing valuable insights to assist you in selecting the most suitable time tracking strategy for your organization.

Pen and Paper: The Original Time Tracker

The pen-and-paper method, one of the earliest forms of time tracking, operates on a simple principle. Employees manually record their start and end times, along with any breaks, on a paper timesheet. This method is straightforward and familiar to most, making it a viable option for a range of work environments, especially where technology is limited or unnecessary.

Let's explore the pros and cons to understand better where pen and paper time tracking stands today.

  • Ease of Use: Paper timesheets are straightforward, requiring minimal training.
  • Low Cost: This method is budget-friendly, needing only basic stationery.
  • No Tech Needed: Ideal for settings without access to technology.
  • Available Templates: Free online templates make setup easy.
  • Customizable: Easily tailored to specific tracking needs.
  • Physical Record: Offers a tangible record of hours worked.
  • Error-Prone: Susceptible to mistakes and sometimes hard to decipher.
  • Time-Consuming: Filling out can be a lengthy process.
  • Risk of Loss or Damage: Paper records can be easily misplaced or ruined.
  • Lack of Backups: Without digital copies, data loss is permanent.
  • Challenging Reporting: Generating reports from paper data is labor-intensive.
  • Not Ideal for Remote Work: Sharing and reporting hours can be cumbersome.

Despite its simplicity, pen-and-paper tracking may not suit all business environments, particularly those with larger teams or remote work setups.

Digital Time Clocks: Bridging the Gap

Digital time clocks represent a significant advancement in time tracking technology, offering precision and ease in recording work hours. Equipped with employee time tracking software, these systems seamlessly integrate into modern workplaces. Here's a look at their pros and cons:

  • Accuracy and Efficiency: They provide precise tracking of employee hours, reducing the possibility of errors.
  • Ease of Use: User-friendly interfaces make digital time clocks easy to operate.
  • Data Integration: These systems can be integrated with payroll and HR software, streamlining administrative processes.
  • Real-Time Tracking: Offers the ability to track employee hours in real-time, providing up-to-date information.
  • Cost: Digital time clocks can be more expensive than manual methods, both in initial setup and maintenance.
  • Training Requirements: Employees and managers may require training to use these systems effectively.
  • Dependence on Technology: Reliance on power and internet connectivity means that a failure in either can disrupt time tracking.

Mobile Apps: Time Tracking on the Go

Mobile apps have revolutionized time tracking, offering flexibility and efficiency for modern workforces. With features like GPS tracking, these apps provide a dynamic way to monitor work hours, especially for teams on the move. Here's a look at their pros and cons, along with some popular options:

  • Convenience: Accessible from anywhere, making them perfect for remote or field workers.
  • Real-Time Tracking: GPS features allow for accurate tracking of location and time.
  • User-Friendly: Generally easy to use with intuitive interfaces.
  • Integration Capabilities: Many apps can integrate with other business systems for payroll or project management.
  • Dependence on Smart Devices: Requires a smartphone or tablet, which not all employees may have.
  • Data Privacy Concerns: GPS tracking raises issues about employee privacy.
  • Variable Internet Reliability: Effective use depends on a stable internet connection.

Top Employee Hour Tracking Apps

Continuing from the versatility of mobile apps, let's explore the best employee hour-tracking applications available. This section provides an in-depth analysis of top software solutions, focusing on desktop time clocks and their features.


OnTheClock is a robust time tracking software primarily focused on payroll management, with features that streamline and simplify the process of managing employee hours:

  • Time & Attendance Tracking: This feature ensures precise tracking of employee clock-ins and clock-outs, offering clear records of work hours.
  • Automatic Paid Time Off (PTO) Tracking: The software simplifies the monitoring of vacation, sick, and personal time, thereby reducing manual tracking errors.
  • Location & Punch Controls: It ensures employees clock in and out from the correct locations, enhancing the accuracy of time logs.
  • Overtime Tracking: This function automates the calculation of overtime pay, adhering to state-specific rules and providing alerts for impending overtime.

In summary, OnTheClock stands out as a user-friendly and versatile time tracking software designed to simplify time management tasks, enhance accuracy, and improve overall efficiency in tracking employee hours.

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Make Time Tracking Easy with OnTheClock

Simple, Fast, and Reliable


Workyard is a comprehensive workforce management software designed for construction, home services, and property maintenance companies. It provides robust features like GPS time tracking, job costing, scheduling, and labor compliance, making it an all-in-one solution for managing on-site employees.

With its focus on easy usability and accurate job cost recording, Workyard streamlines payroll processes, enhances operational efficiency, and supports compliance with labor laws. Its diverse functionality makes it a valuable tool for businesses seeking to optimize their field operations.


DeskTime is an all-encompassing time tracking application designed for both businesses and freelancers. It stands out as the ultimate tool for developing high-performing teams that consistently achieve their goals. Here are some key features of DeskTime:

  • Performance Evaluation: Allows for an in-depth analysis of tracked time, focusing on the specifics of tasks performed.
  • URL & App Tracking: Monitors websites and applications used throughout the day for a clearer view of digital engagement.
  • Productivity Calculation: Measures individual productivity, identifying top performers and those needing improvement.
  • Project Tracking: Provides precise information on the amount of time spent on each project and task.
  • Document Title Tracking: Ensures team members focus on their assigned tasks.

Choosing the Right Time Tracking System

Selecting the perfect time tracking system for your business requires careful consideration of various features and benefits. This section guides you through the process, highlighting key aspects to consider for making an informed choice that aligns with your business needs and goals.

Steps to Select the Ideal Time Tracker

Step 1: Consult the Team

Begin by engaging with your team or department to understand their preferences and requirements for time tracking. Their input is crucial in choosing a system that meets their needs and fosters autonomy.

Step 2: Define Your Goals

Clarify your objectives for implementing a time tracking system. Align these goals with your team’s needs, emphasizing privacy and focusing only on necessary tracking.

Step 3: Compare Options

With your goals and team input in mind, explore various time tracking apps within your budget that meet your specified criteria.

Step 4: Choose the Software

Select the most suitable software based on your comparison, opting for one that caters to the entire company to avoid confusion and extra costs.

Step 5: Implement Gradually

Introduce the chosen software slowly, starting with a trial period to assess its functionality and suitability for your operations.

Step 6: Gather Feedback

After the trial, collect feedback from your employees to gauge the tool’s effectiveness and ease of use.

Step 7: Implement Company-Wide

Once the tool is vetted and approved, roll it out across the company. Provide ample training and set a full roll-out date to ensure a smooth transition from the old system to the new one.

Budget, Scale, Features: Key Selection Criteria

When choosing a time tracking system, several key criteria must be considered: budget, scale, and features. Each factor plays a pivotal role in finding the right fit for your business.

Budget: Cost is often a primary concern. It's essential to find a system that provides good value without exceeding financial limits. For example, a small startup might opt for a cost-effective solution with basic features, while a larger corporation might invest more in a comprehensive system.

Scale: The size of your business significantly influences your choice. A system that works for a small team may not be adequate for a large enterprise. A medium-sized marketing agency, for instance, might need a system that can handle multiple projects and teams without being as complex as what a multinational corporation would require.

Features: Evaluate the specific features you need. Do you require detailed analytics, GPS tracking, or integration with other business systems? Prioritize features based on your business's unique needs.

Balancing these criteria will guide you to a time tracking system that not only fits your current needs but also scales with your business’s growth.

Implementing Time Tracking in Your Business

Successfully integrating a time tracking system into your business involves careful planning and thoughtful execution. The upcoming steps will guide you through this process, ensuring that the transition is smooth and that the system is embraced by your team for improved productivity and efficiency.

How to Get Employee Buy-In for Time Tracking

Gaining employee support for time tracking is crucial for successful implementation. Here are strategies to ensure your team is on board:

  • Educate on Benefits: Explain the advantages of time tracking in a company meeting. This fosters understanding and highlights how it benefits each employee, such as accurate paychecks and preventing burnout.
  • Transparent Communication: Use honest, clear communication to build trust. Avoid relying solely on emails; in-person meetings or smaller group discussions can be more effective in addressing concerns and questions.
  • Provide Written Documentation: Share a document listing the benefits, like proper work allocation, awareness of routines, and improved work-life balance. This serves as a reference for employees to understand the positive impact of time tracking on their work.
  • Demonstrate Practicality: Show how time tracking reveals effectiveness for meeting deadlines and schedules and assists in record-keeping and time-off requests.

Engaging employees in this manner not only ensures their cooperation but also helps them appreciate the value of time tracking in their professional lives.

Motivating Employees for Better Time Tracking

Getting your team on board with time tracking can be made easier with the right motivation. Here are some simple ways to encourage everyone:

  • Incentivize Accurate Tracking: Offer rewards for consistent and accurate time tracking, such as small bonuses or recognition in team meetings.
  • Showcase Success Stories: Share case studies or examples of how time tracking has improved workflow or productivity in similar organizations.
  • Create a Supportive Environment: Ensure employees feel supported rather than monitored. Emphasize that time tracking is a tool for improvement, not surveillance.
  • Involve Employees in the Process: Encourage feedback and suggestions on the time tracking process, making them feel part of the decision-making.

Best Practices for Managing and Optimizing Your Time Tracking

To make the most out of your time tracking system, it’s important to follow best practices. These ensure that your process is efficient and effective:

  • Regularly Review and Update: Check your time tracking system regularly for any needed updates or adjustments.
  • Train Your Team: Make sure everyone knows how to use the system properly. Continuous training can help.
  • Set Clear Guidelines: Have clear rules on how and when to log time to avoid confusion.
  • Use Data for Improvements: Analyze the data collected to identify areas for improvement in workflows.
  • Integrate with Other Tools: If possible, integrate your time tracking system with other business tools like payroll or project management for seamless operations.

Conclusion: Taking Control of Employee Time

In conclusion, the importance of tracking employee time cannot be overstated. It's more than just a way to record hours; it's a strategic tool that enhances productivity, ensures legal compliance, and improves overall business efficiency.

By carefully selecting and implementing the right time tracking system and by motivating and engaging your employees in the process, you can take control of this crucial aspect of your business operations. Remember, effective time tracking is key to understanding and optimizing how time is spent in your organization, leading to a more organized, productive, and successful business.

OnTheClock Employee Time Tracking

Written by

OnTheClock Team

OnTheClock is the perfect app for business that want to keep track of their employees' time without spending hours doing it. With OnTheClock, you can forget about the old way of doing things.

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