Understanding the Benefits of Employee Time Tracking

What’s the point of time tracking? And how can you convince your team to get their timesheets done without having to chase them down?

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In a perfect world, employees will happily track time every day, and managers can easily see what their people are working on, how long it’s taking them, and where they need to make adjustments to help their people and the business work more efficiently.

In reality, it’s often a mind-numbing game of chase (by managers), avoidance (by employees), and frustration (by everyone).

Employees don’t always understand why they need to track their time. Managers spend time chasing them down to get it done. And everyone feels like they’re wasting a lot of time and effort tracking their hours for reasons that no one quite understands.

Despite all this frustration, you still need accurate time tracking data to make strategic business decisions. So, what’s the point of time tracking? And how can you convince your team to get their timesheets done without having to chase them down?

The benefits of reliable time tracking data

Many of our customers come to us when they can no longer stomach their unreliable data.

Imagine if:

  • Your client is trying to negotiate a lower-priced contract for their next project.
  • Your team is complaining about all the nights and weekends they’re working.
  • Your projects are consistently running late.

With accurate time tracking data, you can:

  • Show your client exactly how much time and effort their projects take, so they understand that lower prices are not an option.
  • See whether your people are spending too much time on work that doesn’t support project outcomes.
  • Understand who’s working on what, and for how long, so you can adjust schedules and keep projects running on time.

The key here is accuracy. Accurate, reliable data is the foundation from which your organization can operate more efficiently. Without accurate information about how people are spending time on projects, you can only guess the right answers to the questions above.

Accurate time data empowers your organization with insight into how things are going, how things went in the past, and what to change in the future.

Still not convinced? Let’s look at a few more reasons why time tracking can be so important for your business:

1. Better data leads to more effective project management

We’ve heard it said that the only thing worse than having to track time is being responsible for other people tracking their time.

Project Managers are highly skilled at balancing all the constantly changing moving parts throughout a project’s lifecycle. But if they don’t have reliable, up-to-date data, they’ll have a difficult time answering key questions to keep the process going.

Imagine if your bank suddenly stopped showing all of your itemized charges and instead just displayed your overall balance. Then, imagine if from time to time, you started to receive “low account balance” alerts. Could you understand where you’re spending too much money or what you needed to change? Could you make changes to your spending habits without visibility into everything that was happening?

Without accurate time tracking data, Project Managers won’t have the visibility to answer critical questions, like:

  • What’s the burn on my project?
  • Who’s available to help next week / month / quarter?
  • Does my team know what to do tomorrow / next week / when I’m out of town ?

Often, Project Managers waste so much time chasing down and communicating information that, by the time they get what they need, it’s likely out-of-date.

We estimate that Project Managers typically spend a minimum of 2 hours per week trying to find up-to-date project information. With a team of 40 Project Managers, that’s 3,840 hours per year. Cutting that inefficiency in half (saving only 1 hour per week) would save $288,000 per year in billable opportunity cost.*

2. Reliable historical data improves future projects estimates

Let’s say you finish a project that took 5% more time than expected to complete. This is just 100 hours more in a 2,000-hour project. If you continue to underestimate future projects by just 5%, it can have a big impact over the course of a year.

In fact, we estimate the impact of 10 similar projects to be $120,000 in lost revenue due to inaccurate estimation.* That’s 1,000 hours that could have been paid for by the client or spent on other work.

If your team can’t easily access a project retrospective, your estimated fees for every future project will be thrown off. And if you don’t have reliable time entry data, it can lead to undercharging clients or under-scoping the time it will take your team to complete similar work.

Estimation doesn’t need to be an art; it can be a science. But, accurate project estimates must be built on reliable time tracking data.

3. Employees are more likely to track their time if they understand why

Employees often don’t understand how they fit within the ecosystem of the organization, and why their time tracking efforts matter. But if you can get them onboard, it will save everyone a lot of frustration.

Imagine Maria worked all last night on a presentation. Understandably, the last thing she wants to do is her timesheet. If she doesn’t understand why the data is important, it’s easy to misrepresent her effort or skip tracking her time altogether.

But, the failure to communicate the extra time Maria spent on the project has a ripple effect:

  • Your company may not be able to capture revenue for the actual hours she worked.
  • The Account Manager won’t fully understand the effort required to deliver the work for future planning, and they may be forced to estimate Maria’s time.
  • The Project Manager will have to spend their time tracking her down.
  • Maria won’t be recognized for the extra time she spent and — even worse — she’s setting unrealistic expectations that she’ll be able to complete the same caliber of work in the same amount of time that she reported this round.

In the end, this creates a lot of frustration for everyone involved. The Account Manager is forced to deal with inaccurate information. The Project Manager needs to spend extra effort chasing her timesheet. And Maria may even feel slighted or resentful about working those extra hours without any credit.

And here’s the kicker:

All this frustration can be avoided if Maria understands the benefits behind time tracking in the first place. We’re not talking about how her actions affect the organization or her teammates. Maria needs to understand how time tracking benefits her.

So, if you’re trying to convince your team why time tracking matters, ask yourself:

  • What do employees gain by accurately tracking their time?
  • What do employees lose by not tracking their time?
  • How does each person’s time tracking behaviors affect their teammates?
  • How does time tracking help our organization stay profitable?
  • How can I reinforce and celebrate the time tracking behaviors I want to see on my team?

Use these questions to help every member of your team understand the connection between project planning and time tracking, so they see the impact of their effort, know how it affects their teammates, and understand why they need to keep their timesheets accurate.

Finding the right solution for tracking employee time

Requiring your team to track time can feel like a burden, but not if you implement it strategically.

Unless people are working 100% of their time on one project, your team should be tracking their time on a daily basis. Yes, we know it’s painful — impossible, you might say! But reported hours are the best source of real data about how your projects are performing.

You don’t need to ask your team to report more detail than necessary to collect actionable information. At a minimum, you’re assigning approximate hours towards projects and phases. Ideally, you’re recording actual hours against categories, and even adding quick descriptive notes.

We recommend time tracking categories that are specific enough for you to understand where the time is going, but general enough that your timesheets aren’t overly fragmented. For example, some potential categories could be research, proposals, prototyping, bug fixing, client meetings, or travel.

Keeping these categories high level is also beneficial when running reports. You’ll understand where your team is spending their time at a high level, instead of getting into the weeds with how much time was spent on specific, one-off tasks.

There are a lot of time tracking tools out there, from timers, to facial recognition technology, to old fashioned excel spreadsheets. And we’d be remiss not to mention how our time tracking solution works.

How 10,000ft time tracking works

We believe getting accurate and reliable data from your team requires a frictionless user experience. Time tracking in 10,000ft is carefully designed to be simple and powerful enough for employees, managers, and executives to quickly get the critical information they need.

Our timesheets contain pre-populated suggested hours based on the planned project schedule. This means the timesheet is not only a place to track effort, but a place to see how much time has been budgeted for each project or phase. Team members can both see the budget of time for the week and easily report if they work more or less than anticipated.

benefits of time tracking

Even as work ebbs and flows, and changes inevitably come up, team members can stay up-to-date on the status of their projects without being weighed down by unnecessary levels of detail or granularity.

“We would never switch time tracking tools because the quality of data we get from 10,000ft is noticeably better than others we've used.”
- Indiana University Creative Services

Should your company track time?

When time tracking data is critical to your company’s success, it’s a necessary task.

The cost of hidden or inaccurate data affects the whole team, a lack of visibility into the process affects the bottom line, and the time it takes the team to manage these challenges could be better spent on actual project work.

Make the process simple and effective by getting buy-in from your team and using the right tools. Instead of just guessing, you’ll have the reliable data you need to make informed and impactful decisions to grow your business.

*Calculation Appendix

1. Project Managers: 48 weeks in a year * 2 hours / week * 40 project managers = 3,840 hours. ½ those hours = 1920 * $150 (bill rate) = $288K in opportunity cost

2. Utilization: With 1920 working hours in a year * 200 resources = 384,000 hours of potential time. Assume a bill rate of $120 / hour. 100% billable = $46,080,000 * 5% = $2,304,000

3. Project Estimation: 100 hours underestimated for 10 projects = 1000 hours * $120 rate = $120,000 / year

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