Benjamin Franklin once said, “Time is money”; that age-old aphorism still holds true, especially for organizations whose labor workforce is primarily comprised of hourly workers. In 2019, 82.3M workers aged 16 and older in the United States were paid on an hourly basis, representing around 58% of the entire working population . Organizations with a predominantly hourly workforce population need to make sure they track employee time and pay them accurately, and to comply with government labor laws like the Fair Labor Standards Act (FLSA). In addition to federal laws, individual states and local governments have passed multiple wage and hour laws around daily/weekly overtime, wage-theft, meal/rest breaks to support hourly employees.
To track labor hours, organizations tend to rely on time-collection methods like paper punch cards, paper forms, wall mounted clocks, biometric clocks, web portals, or mobile devices. In asset intensive industries like manufacturing facilities, the act of recording time results in a logistical chokepoint – a physical bottleneck where all employees pass through multiple times a day. One of the authors (Matt) has worked in such facilities, and it is apparent that helping employees move quickly through these chokepoints represents significant operational and financial benefits, as well as a safety benefit in the COVID era. In this article, we look at how COVID-19 has transformed the once-standard time entry process and potential implications for organizations that do not have the right infrastructure or processes in place.
It is no secret that COVID-19 has transformed the traditional punch-in/punch-out experience. As per guidance from CDC and WHO, individuals can get COVID-19 by touching a contaminated surface and then touching their eyes, nose, or mouth. Essential workers are most vulnerable, as clocks are used in almost all industries that are classified as essential today, for example, public sector, grocery, healthcare, services, etc. It is critical that we acknowledge the risk taken by these essential workers everyday and incorporate processes that help ensure workplace safety.
Biometric clocks, which were becoming increasingly popular due to their convenience factor, now have a significant risk component. For example, employees of the New York Police Department (NYPD) and Metropolitan Transport Authority (MTA) were protesting the use of biometric clocks due to infection risk and the organizations have temporarily suspended the use of timeclocks because of infection fears .
Employers are now required to take precautions and adopt processes like pre-access health screening and monitoring, social distancing at clocks, regular disinfection of clocks, and staggered shift times as some examples. All these requirements are causing clocking stations to become a physical chokepoint, reducing overall clock throughput, and impacting employee productivity, while the long lines increase employee exposure. Based on Ceridian proprietary research, there has been a 100% increase in the time required for every employee to punch-in when following government mandated health and safety requirements. The 100% increase in time required has a financial cost for employers. Based on our calculations, the lower throughput can result in 22.5 hours of lost productive time per day, or a financial cost of ~$59,000 per year for a location with 90 employees.
The response from the industry has been varied. To alleviate the physical choke points and ensure worker safety, some companies are changing their technology infrastructure, some are using a stylus pen to avoid touching the keypad, some have adopted manual attendance, and some have reverted to using old punch cards. Consequently, considerations about non-exempt employees who are working at remote sites or working from home, but whose hours still need to be tracked must also be factored in. All of this has led to a renewed focus on increasing clock counts at locations, contactless technology, mobile punching, thermal screening, and clock-in questionnaires on the clock itself.
On average, organizations are spending $5,208 per employee on various safety practices , with e-commerce behemoth Amazon recently investing $800M to implement 150+ industry protocols for social distancing, mask wearing, and cleanliness standards . These investments are the right thing to do, but businesses are also acutely aware of the potential implications of non-compliance. If employees get infected due to lax workplace safety, regulators are quick to penalize the business and employee lawsuits may soon follow.
To summarize, the need for additional safety protocols has significantly reduced clock throughput and can be a productivity drain if not implemented properly. Failure to comply with COVID regulations carries reputational risk, in addition to financial costs associated with lost time and productivity. A high-impact action item for HRIS teams is to increase clock counts per location. Increasing clock counts is not just a strategic solution from a safety perspective, but also cost efficient with a less than one-year payback period.
A COVID-19 outbreak can easily shutdown an entire location/site and if a company is perceived as “not doing enough” by its employees, it can have long-term consequences on employee engagement and trust. Investing in the right tools and processes can help significantly reduce the risk exposure from a compliance and reputational standpoint.
 Characteristics of minimum wage workers, U.S. Bureau of Labor Statistics, 2019
 State of the Response, Council National Safety Council, 2020
 How Amazon became a pandemic giant - and why that could be a threat to us all, The Guardian, 2020
 MYA suspends employee fingerprint scans to combat coronavirus, Post NY, 2020
The Ceridian Institute provides forward-looking insights that build awareness and advocacy of the trends and challenges facing the workplace. The Institute is composed of industry leaders from Ceridian’s Industry, Value, and Solution advisories, reflecting the team’s research into the future of work and business intelligence.View Collection
Matthew has extensive experience in the Technology and Human Capital Management space, and currently leads Ceridian’s Global Value Advisory practice, consulting numerous organizations across a variety of industries. He holds a Master of Business Administration from the University of Toronto.View Collection
Roshan is part of Ceridian’s Value Advisory practice, a team dedicated to bringing strategic thinking, project management, and technology together to help shape the transformation agenda for senior HR and business leaders. He has 9+ years of experience and holds an MBA from the Schulich School of Business.View Collection