Time and attendance tracking are the imperative lead-up to paying employees. While the workflow, traditionally done on slips of paper and punch-out cards, is often associated with low-wage work in markets like the food and services industry, the need to track employee time and attendance is proliferating across a variety of verticals, with professionals now embracing the gig economy and the financial gains of working multiple jobs.
The technology may not catch the most attention among payroll and human resources innovators, but it is essential to the accurate and timely processing of payments to talent. And according to Adam Day, CEO of Timerack, there is plenty of opportunity to optimize time tracking through technologies more sophisticated than many might assume — and certainly more efficient than paper and physical time cards.
Day reflected on some of these innovations in a recent discussion with PYMNTS and discussed how time tracking technology can combat some of the biggest threats to the payroll industry, including fraud.
Setting Payroll Up For Success
It’s not necessarily a challenging feat to digitize employee time and attendance tracking. What is more difficult, however, is using that information to deliver payroll professionals the insights they need to make accurate wage payments to staff.
“One of the biggest struggles was they didn’t have integration with partners,” explained Day. “Everybody as a third-party, and integration never went smoothly.”
With an extensive professional background in payroll bureaus, Day understood this pain point well, pointing to the usual suspects of manual data entry and a lack of data consolidation within payroll systems. But as the payroll, and indeed the broader ecosystem of work and labor, have evolved, time tracking has faced new hurdles to clear.
The rise of gig work and the propensity for professionals to have more than one job have created an opportunity for time tracking solutions to collaborate with multiple payroll providers and offer employees digital, mobile-friendly ways to manage their time and attendance across employers from a single portal. It’s an area that Day said has embraced digitization and innovation, with benefits for the employer as well.
“Mobile interaction and biometric interaction has increased dramatically,” he said. “Being able to know where an employee punched, to ensure that they’re at that homecare health site versus a gas station down the street, is becoming more important.”
Using tools like biometric identity verification and geo-tracking can help employers better manage their workforce. For the employee, consolidation of data can help ensure they’re getting paid accurately — a feature that Day said will grow more important as tools like payroll advances or early wage access require accurate insights into how much a professional has actually worked.
Cutting Out The Risk
Such technologies have also proven valuable for employers to combat fraud and other risks in the payroll arena.
From a liability standpoint, Day said, automated time tracking can cut down the risk of favoritism and ensure that all workplace policies are applied unilaterally across all workers.
Unsurprisingly, paper time sheets and physical punch-out cards are easily manipulated and, as a result, can fuel payroll fraud. Across the payroll arena, Day said that fraud remains a significant concern.
“It is a definite threat,” he said, noting that Timecentric, a human resources technology investment group, and of which Day is also president and CEO, acquired Timerack in May of 2019 after its previous parent company, Financial Business Group (FBG) Holdings, faced legal matters pertaining to another one of its firms within its portfolio. The firm, Cachet Financial Services, served as payroll processor for MyPayrollHR, whose own CEO was arrested in September 2019 on allegations of fraud to the tune of $70 million.
All that is to say: fraud remains a significant headache for the payroll industry, whether it’s through individual employees fudging time and attendance numbers to receive compensation for work they did not perform, or higher-level malicious activity at the bureau-level.
Automated time and attendance tracking alone cannot mitigate all of those threats. But, as Day emphasized, it can certainly address a significant portion of the fraud risk for employers, with technology now able to provide audit and tracing tools to promote visibility into who made changes to what data.
“Automation eliminates a lot of the traditional fraud,” said Day. “Unfortunately, somebody else is now going to find a new way to defraud a company. Some of it is internal theft, and some of it is bureau theft. But automation certainly mitigates that extensively.”