When looking at the potential annual return on investment from implementing a Time & Attendance system it is important to consider all of the elements that contribute to the total saving, these are:Payroll Errors
Some sources quote the payroll processing error rate to be between 1% and 5% of the total payroll cost and figures as high as 8% have been suggested in the past. There is no doubt that implementing a Time & Attendance system will reduce the payroll error rate. In calculating your potential saving in this area, we will assume a very conservative 1% reduction in the error rate. If a company has 200 employees, who earn on average a gross weekly wage £450, then the annual saving resulting from a 1% reduction in the payroll error rate is: 200 x 450 x 52 x 1% = £46,800 It's also worth noting that payroll errors are almost invariably 'one way' with underpayments always being reported. Overpayments are seldom brought to the attention of the payroll department! Administration Cost
It is estimated that it takes a payroll clerk an average of 7 minutes per employee to process a time card. With a Time & Attendance system from Gane International, all the calculations are automatic. If we use the 200 employee company above as an example then the time saved by using GaneTime to process attendance data is: 200 x 7 x 52 = 72,800 minutes or 1,213 hours per year. This is time that could be spent on other tasks or, assuming the payroll clerk is paid a salary of £26,000 per year, equates to a monetary value of some £15,162. Worked Hours
According to the statistics of the American Payroll Association, hourly paid employees are overpaid by an average of 10 minutes per day due to arriving late, leaving early, extended lunch hours, etc, etc, etc.... The introduction of an automated Time & Attendance system will improve the attendance habits of employees and will ensure that they are only paid for the hours that they work. In order to calculate the potential savings in this area, we'll assume a nominal reduction in this figure of just 5 minutes per day, although it should be remembered that all lateness and unauthorised absence will be detected by the introduction of electronic data capture terminals. Again, using our 200 employee company as an example, the minimum annual saving can be calculated as follows: Saving per week per employee = £11.25 (hourly rate) x 25 (minutes saved per week) / 60 = £4.68 £4.68 x 200 x 52 = £48,672 |
