Why Track Employee Time and How To Do It Effectively

10 min readJan 27, 2021
Photo by Chris Montgomery on Unsplash

Time management is a skill that they don’t teach us at school but that directly impacts how much we achieve in life, career and business. Time waits for none but it’s up to us how we use it. To manage time effectively, we first need to acquire time tracking skills, review our performance to learn from our mistakes and build improved time management approaches.

Time tracking is not what it used to be half a century ago. Today, we’ve got all the tools and scientifically-proven productivity approaches to building solid time tracking habits that fit our jobs, businesses and lifestyle. Among other benefits, time tracking does a great job at improving our self-awareness, discipline and productive mindset. But what does time tracking have to do with the business environment — let’s find out.

Why Track Employee Time?

Poor time tracking and time management approaches may cost your business a penny. A 2018 survey conducted by Udemy revealed that five in ten people struggle with distractions and notice a decline in their ability to stay focused. Another study showed that employees compensate for interruptions and unproductive time by working faster. This working pace leads to a high level of pressure and stress in employees, reduces their performance and job satisfaction. On average, a single company loses about $700 per employee every year due to employee absenteeism and non-work related activities.

Companies that use time tracking software prevent time and money leaks and help their employees develop more self-awareness and sharper focus. When you have a timer running against one of your tasks, you have no other choice but to laser-focus on it and put distractions on the backburner. So timers encourage single-tasking and promote higher performance.

Time tracking benefits go even further than that. Let’s see how businesses, project managers and individual employees can benefit from time tracking software.

Business Benefits

  • Increased transparency
  • Capture billable and non-billable hours separately
  • Accurate client billing
  • More trust with their clients through time logs and reports
  • Revealed hidden costs
  • Paid time off management

Project Management Benefits

  • Real-time monitoring of the project progress
  • Identifying possible issues and addressing them in the early stages
  • Keep track of employee productivity and engagement
  • Attendance tracking
  • Establishing efficient workflows and routines
  • Improved scheduling and estimates for future projects
  • Measured ROI for individual projects
  • Uncovered opportunities for outsourcing

Employees’ Benefits

  • Accurate payrolls
  • Improved work-life balance for remote and flexible workers
  • Increased productivity, self-discipline and focus
  • A better understanding of personal capacity meaning fewer burnout cases
  • Opportunity to reveal and benefit from peak performance time
  • Documented overtime hours
  • Getting better at estimating and planning
  • Having exact data on regular work time, overtime, and leave balances

To sum up, why track employee hours? Time tracking makes a basis that can support different areas of your business: project management, billing and accounting, absence management and more. Such intel helps you make smarter business decisions, better prioritize employee schedules and daily activities. If you are new to business time management solutions, let’s see how you can introduce one to your team and implement it into the existing workflow.

How to Introduce Time Tracking to Your Team

Many employees feel uneasy about time tracking, thinking that their project managers or employers want to micromanage and spy on them and not without reason. Among modern time tracking software, you can find privacy-invasive solutions that can access device data, monitor application activity, record keyboard input and mouse clicks, take screenshots and capture video of their screens.

👉 Continue reading: The Pitfalls of Employee Monitoring in the Age of Remote Working

In 2018 social media had been buzzing about privacy violations by Upwork — a digital freelance platform for freelancers that tracked their freelancers using screenshots, measuring the frequency of their clicks and keystrokes, and even sometimes taking webcam photos of the workers. You can imagine how stressed your employees might feel about any kind of “tracking” at work.

At actiTIME, we don’t have surveillance features in our time tracking tool and highly recommend that you don’t implement this kind of software at the workplaces. To make sure that you and your team make the most of your time tracking software, introduce the tool and its importance to your team members.

1. Clarify Purpose & Benefits of Time Tracking

First of all, identify and communicate the purpose of introducing time tracking software: monitor activities and their progress inside the teams, record performance and use it for better estimates and goal-setting, capturing billable and non-billable hours — share the global goals and benefits with your teams.

Online timesheet interface in actiTIME where every user can select task parameters
they want to see in their timesheets

Hold a meeting with your project managers to discuss how they can help teams implement new software into their workflow and how managers can use their time logs for better resource and team management. If your teams work on several projects or provide services, develop a plan of how managers could calculate project ROI, manage billable and non-billable data and use this data to build bills and invoices. If your time tracker supports absence management features, discuss how project managers could manage sick leaves, vacations and other types of absences for better workload management.

Educate your HR managers and accountants on the upcoming changes in their workflows. Think of how human resource teams can use attendance data, manage paid time off balances and calculate data-based payrolls. Develop regulations that will define the correspondent rules, procedures and violations. Discuss how accounting teams can use time logs for more accurate payrolls, develop an overtime policy if necessary.

And finally, gather your teams and discuss how individual employees can benefit from the new time tracking tool. Turn its business and project management benefits into employee benefits that may include:

  • Fair workload based on their previous performance
  • Getting paid for every overtime minute
  • More flexibility in employee schedules
  • Streamlined absence and attendance tracking
  • Time tracking on the go for field workers

2. Eliminate Fears & Doubts

Employees tend to perceive any surveillance in a negative way. Here are a few examples of the most common fears and thoughts about workplace time tracking:

  • Do the managers not trust us?
  • What kind of data are they going to track?
  • Am I going to be punished for underperformance?
  • Are they going to compare my performance against my peers’?
  • Am I going to be fired if I’m at the bottom of this performance list?

Make sure to address these and other concerns to eliminate pressure and stress in your team. Emphasize that this software doesn’t record their activity (if it really doesn’t) and only processes time-related data that your employees add to the system through timers, timesheets, mobile apps and other means. And finally, reassure your teams won’t be micromanaged and that their time tracking data won’t be used against them in any way.

3. Give Them a Product Tour

Business time trackers offer different access and privacy settings for different groups of users. Fine-tune your product, assign admins and managers, create user accounts — make the final software adjustments and be ready to introduce different user groups into the details. Ensure that employees have access to necessary features and understand how to use them; project managers can access data and analytics tools; HR and accounting teams know how to extract specific data, and your admin users have corresponding rights for managing data, user roles, and settings.

4. Establish Guidelines

If you are introducing time tracking software for the first time, your employees might feel overwhelmed. We recommend sending follow-up letters after the meetings that contain necessary instructions, policies, guidelines, links to product documentation and contacts of admin users that could help with the software.

5. Review Implementation Progress

To maintain a positive working environment and help employees get used to a new piece of software, encourage team feedback through meetings or online surveys. Make sure to include open questions and ask them to evaluate their experience, share pain points and suggest improvements.

Best Time Tracking Practices For Businesses

Time tracking software can be both an insightful business tool and a time-consuming burden on your team’s shoulders. To make the most of your time tracking practices, consider the following best practices.

Develop Clear Time Tracking Policy

Establish and document clear rules and guidelines for project managers, regular users, HR and accounting teams. Develop a consistent work structure that fits your time tracking needs, define time tracking rules for regular users and develop guidelines for accountants and HR managers. Distribute this policy across your teams and keep it updated.

Track Hours Right Away (Don’t Wait For Friday!)

Employees who are not used to regular time logging tend to fill in their time tracking data at the end of the day or even worse — at the end of the week. To maintain good records and best practices, make sure to promote time tracking against current tasks through timesheets and timers and include these rules in your policy. Develop a timekeeping approach that would take your employees no more than a few minutes each day.

actiTIME’s time tracking browser extension

Supply Time Logs With Comments

Another best practice that remote teams and consultants can benefit from is time log comments. Introduce a process in which employees should add brief comments to their time logs describing their activities inside the tasks. This way, your managers will be aware of the details and consultancy clients will be able to review them in their billing summaries.

Assign Users Responsible For Review

Provide team managers with correspondent user roles and data access so that they could review time logs and statistics across their team members, build analytics and reports. If you use timesheet software, allow them to lock employee timesheets to restrict employee access to previous time logs and prevent them from making changes. Double-check regular user permissions to make sure that they can’t review other users’ data and change software settings.

Track Billable & Non-Billable Activities

Service-providing companies that use time trackers for accurate client billing usually don’t keep track of non-billable activities. We advise including non-billable activities in your time tracking software not to miss insights into the distribution of time across administrative and marketing tasks. This way, you’ll be able to gather analytics across non-billable activities, identify time sinks and develop approaches to generate more income.

Billing Summary report in actiTIME — set up work rates
and get the software to calculate the billable amounts

Review Team Productivity & Project Profitability

Use reporting and analytics features regularly to assess your projects’ ROI, review project costs, team productivity, quantify project estimations vs. project evaluation. If you identify bottlenecks at the early project stages, you’ll be able to manage them in a timely manner and ensure the success of your projects.

Reports dashboard in actiTIME — set up real-time data widgets
and add report shortcuts for quick access

Automate Time Tracking Routine

Streamline time tracking routines and make them hands-free as much as possible. Time tracking routines take time but you can keep it to the minimum with the right approach. Encourage your teams to use timers, mobile apps and time tracking browser extensions so they could choose tasks from the list, hit the “start” and “stop” buttons and pass on to their next tasks.

Integrate Time Tracking with Your Industry Software

Most time tracking solutions offer limited time logging features and analytics tools and don’t support project management functionality. Learn how you can connect your software so that they could exchange data in the background saving your time on manual work. Explore your time tracker’s integration capabilities with accounting, human resource and industry-specific software and make use of them to save time on business-related activities.

Ready to Track Employee Time?

The market of time tracking software offers hundreds of solutions, but most of them offer limited functionality that cover the needs of individual users only. Here are a few ideas of what features you need to look for in business time trackers:

  • Employee scheduling
  • Hourly paid and salaried employee support
  • Work scope management
  • Reminders and notifications
  • Job and project costing
  • Reports and analytics features
  • Support for paid time off management
  • Absence management features
  • Flexible product configuration that allows turning off unnecessary features and keeping your software interface clean and easy-to-navigate
  • Integration with a payroll provider or in-built billing and invoicing features
  • Online vs on-premise options
  • Mobile apps

To cover most business needs, we created actiTIME time tracking software that provides all the features mentioned in this list.

To explore its functionality, you can start a free 30-day trial or book a product demo with our experts that will show you around and set up actiTIME to meet your company standards and regulations.




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