Labor Tracking: the ultimate guide for business owners

It was 2008, and as the owner of a roofing business myself, I was facing the same challenge as many other business owners around the country – how am I going to weather this recession?

Here’s the reality I was facing at that moment.

Yes, I was looking for ways to save money. However, you can only let go of so many people and sell so many trucks before you no longer are able to operate. You still have to run a business, you still have to survive and be able to provide the services you say you offer.

So, one Friday afternoon, as I was wrestling with what I needed to do next to keep going forward, I started asking myself:

“What are the most expensive parts of my business, and what of those expenses can I control?”

The first thing that came to mind was business insurance. Insurance can feel like a money pit, and while it was one of the largest line items in my budget, I moved on from it quickly as a necessary evil of running a company. I knew I could only negotiate the premiums down so much, which meant there wasn’t much money to be saved in that category.

I realized that labor was my greatest expense

I had already decided I couldn’t let go of any more people on my crews if I wanted to be able to stay in business and serve my customers. Still, I saw an opportunity for cost savings that went beyond layoffs.

Layoffs aren’t the only way. In fact, I determined the only significant lever around labor expenses I could potentially pull was productivity.

With that in mind, I started looking through the time sheets of my crews. And it didn’t take long for me to notice a not-so-great trend.

There were a lot of inconsistencies. For example, time would be logged but there would be no job names or locations listed. I also noticed that virtually every time sheet from every employee every single day had the exact same punch-in and punch-out time of 7 a.m. to 3:30 p.m.

Even though I knew my guys weren’t stealing from me or trying to pull a fast one, I knew immediately I was losing money.

To show you what I mean, let’s pretend for a moment that every employee I had overreported in their time-tracking by 15 minutes each day. A mere 15 minutes may not seem like much, but across an entire year that can add up to over $3,000 for a single employee I’ve paid out for work that isn’t being done.

And given what I was looking at, I knew I was dealing with much more than 15 minutes lost, per person. If I were to apply the same bare minimum error margin across all my employees, I’m looking at $103,000 overpaid across the year.

Unreliable time tracking is also a liability

Leaving aside the money I was losing, not being able to consider my own time-keeping reliable is a significant liability when it comes to customers.

Someone can push back on an invoice after it’s greater than they expect, and if I don’t have labor tracking solutions and best practices in place that I can trust, I don’t have the ability to validate their concerns or justify the charges, whatever the circumstance may be.

I can’t say with authority, “I know my guys showed up at 8 a.m. because it’s what’s tracked in our system,” without acknowledging they may be able to come back and say, “That’s not true, I was at my house all morning and no one showed up until 10 a.m.,” and I can’t counter that.

It’s like that old saying if you can’t measure it, you can’t manage it – and self-governed time-tracking protocols with no automation or systemic oversight are not measurement. That’s an honor system that relies on 100% accuracy every single time.

That’s simply not possible to achieve.

At the time, there were some labor tracking solutions out there

Unfortunately, for the most part, they weren’t that great.

Back then, the time tracking and attendance solutions were more hassle than they were worth. Yes, they were much more evolved than the wall-hung punch clocks of yesteryear, they were mobile … to an extent.

For example, one solution we tried gave us time clocks to hook on the fences at a job site. When an employee wanted to clock in, they’d hold a fob up to the clock and it would register they had arrived. When they were ready to clock out, they’d hold up a different fob and it would register they were done with work.

This sounds great, in theory, but we still had to physically retrieve the data from those sites using a Palm Pilot.

Our business operates in New Hampshire, Maryland, and the middle of Pennsylvania. That meant in order to use this solution that was supposed to save me money through more effective labor-tracking, I had to pay someone to drive out to each site to collect the data.

I’m all about spending money to make money, but this was not the way.

It was a terrible system.

And if you’re reading this guide, I’m willing to bet some of my story resonates with you.

When you own a labor-driven business, tracking productivity is everything

I’ve learned that from my own experiences, and those experiences I’ve shared with you here are why I founded Labor Sync.

Small and medium-sized business owners like you, whose service delivery is dependent upon a labor-based workforce, must have labor tracking solutions at your fingertips that help you save money and maintain a sterling reputation with your customers.

But the goal of this guide isn’t to sell you on Labor Sync.

The goal of this guide is to empower you, the business owner with the strategic insights and expertise you need to understand how to do labor tracking well for your business, what best practices for labor tracking you need to be aware of, and what you need to know (and do) to find the right labor tracking solution for you.

OK, enough preamble. Let’s dig into the insights that brought you here in the first place.