Inefficient paper timecards. Spreadsheet-based vacation accruals. Manual payroll calculations.
Until recently, this was how our company collected and tracked time and attendance data and processed payroll for all employees. Not only was this approach time-consuming and error-prone, but it simply couldn’t provide enough insight into critical business metrics.
The solution? A cloud-based workforce management system that successfully automated the entire timekeeping and payroll process to save time and increase productivity. But this solution also went “above and beyond” by delivering other significant business benefits — most notably the ability to identify labor costs and use them to measure efficiency and understand total manufacturing costs. All of this has helped our company increase our competitive advantage.
The Challenges Associated with Paper-Based Timekeeping
Our organization actually consists of three independent companies — Maple Leaf Cheese, Edelweiss Creamery, and Alpine Slicing & Cheese Conversion. Each company operates independently but shares resources such as IT, payroll, human resources, and administration.
To make things even more challenging, each organization also had its own pay and work rules and methods for tracking employee time. All of this resulted in a mix of different paper timecards, collection forms, and even an outdated timekeeping system. Not surprisingly, it was difficult for us to collect and track employees’ time, calculate payroll, and analyze labor data — in a way that was consistent and effective.
For example, each pay period, a courier had to visit each company, collect the various timecards and payroll reports, and deliver them to the main office. Then our HR representative had to manually calculate each employee’s hours and minutes and convert them to decimal hours as part of the payroll process, which inevitably led to errors and lost time.
The Need for a Better Solution — for All Departments
Worse, our manual approach simply didn’t give HR “fingertip access” to vital information it needed day in and day out.
“Employees used to come to me with questions about accruals or vacation balances,” says Stephanie Nusbaum, Maple Leaf Cheesemakers’ HR manager. “I spent a lot of time digging through files, updating balances in spreadsheets, and going back and forth with the employee if they had a discrepancy. As a result, I wasn’t able to focus on more strategic initiatives — like creating new HR programs — as much as I would have liked.”
Additionally, this manual approach made it nearly impossible for line managers to factor in labor costs when they calculated costs by business unit or production line. For an organization that prides itself on continuous improvement, we knew it was time for change.
Taking Workforce Management to the Cloud
After evaluating many vendors, we selected Kronos and its cloud-based timekeeping and HR solution. The fact that the application was cloud-based was an important consideration. First, since the vendor is responsible for hosting and maintaining the solution, it helped take some of the burden off our IT staff. Plus, any user could easily access the system from home or the road, wherever convenient for them, which we felt would help increase adoption and productivity.
Now all hourly, salaried, and temporary employees punch in and out at a time clock, and their actual work hours are captured and stored. The system automatically converts employee’s time to decimal hours and calculates pay according to each business unit’s specific pay rules. Plus, it’s all in one central database, which gives us access to critical workforce management data with limited IT support required.
By eliminating the need to re-key paper timecards, the overall quality and accuracy of data have improved, which has led to less payroll errors and reduced compliance risk. Productivity has soared, too, especially in HR. “The time savings have been significant,” explains Nusbaum. “It now takes far less time to respond to employee questions since all of the data is right there in the system. I would be lost without it.”
Nusbaum reports that the system has helped her automate the process of enrolling employees in benefits programs while also helping the entire organization better track tardiness and absenteeism. She is also now able to focus on important HR tasks such as creating new programs, updating policies, and even creating the company handbook.
Better Visibility Leads to Better Business Results
Most importantly, we now have insight into key business metrics for each business unit and cost center. For example, at the cheese conversion center, a line manager can now examine labor cost information by line or by job function, such as creating cheese chunks, slices, or sticks. Employees’ time is allocated to the right cost center within the system. This enables the plant manager to view employee hours in a way she prefers – for example, cost center daily or cost center weekly. She tracks how many units are produced and uses the labor data from the system to help measure overall efficiency and identify areas for improvement.
This is a major benefit, and one that has helped the entire business. With the newfound ability to track true hours by cost center, we can now factor actual labor costs into our total cost of manufacturing. This means we can estimate jobs more accurately and better prepare cost quotations. In turn, this has helped us to become more competitive, and ultimately, more profitable.
Vicki Bergendal is the IT Administrator at Maple Leaf Cheesemakers, Inc.