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by Brian Westfall,
Market Research Associate
Last Updated: December 1, 2016


Put simply, time and attendance software automates the process of capturing employee work hours. In reality, though, it’s much more than just an electronic time clock.

These systems play an important role in multiple business operations, including:

  • Minimizing human errors associated with monitoring labor and absences
  • Reducing the time and effort required to manage human resources (HR) processes
  • Facilitating scheduling, estimating, payroll and labor regulation management

We’ve created this guide to help prospective time and attendance software buyers make a more informed purchase decision regarding this pivotal aspect of their business.

Here's what we'll cover:

What Is Time and Attendance Software?
Common Features of Time and Attendance Software
Market Trends to Understand

What Is Time and Attendance Software?

Time and attendance software is often referred to as employee time clock software. These terms are used interchangeable and refer to systems that perform a variety of every-day functions, including:

  • Managing employee schedules*
  • Tracking the hours logged by each employee
  • Monitoring overtime and absences due to vacation, sick leave and holidays

*Note: If you’re looking for a system to track employee hours but need more advanced scheduling capabilities, such as shift scheduling and schedule distribution, head over to our guide explaining employee scheduling software.

Businesses can purchase time and attendance software as a standalone, or “best-of-breed” solution, or as part of a larger HR suite. Buyers who purchase standalone time and attendance software should check that the product integrates with their existing payroll system. This helps ensure seamless data transfer between the programs, resulting in an efficient payment process. In an integrated suite, the time and attendance module will connect with payroll as well as other important HR functions, such as benefits administration and employee evaluation.


Employee wages tied to work hours, as shown in Patriot Payroll. Integrating payroll and time and attendance systems helps businesses keep track of the hours logged by each employee. This is especially helpful if the pay-rate is different for overtime hours.

Common Features of Time and Attendance Software

Features and functionality of employee time tracking software include:

Punch-clock and manual time entry The most basic functionality is the ability to clock in and out and to manually enter times when necessary. Some tools also offer magnetic card readers, automated start/stop capability (e.g., clocking in when you turn your computer on, and out when you turn it off), PINs and other features to facilitate time-clocking.
Sick/vacation/ holiday/PTO management Allows you to track accrual and usage of sick days, vacation days, holidays or paid time off, allowing for easy calculation of attendance, remaining vacation days and approval of paid time off.
Mobile integration Particularly useful for companies whose employees spend a lot of time out of the office, mobile apps allow the employee to clock in and out wherever they are. Many also include GPS tracking tools, supporting you in optimizing time usage.
Employee scheduling Typical scheduling systems allow you to create and monitor schedules and compare them to the actual time worked. Managers can also set overtime alerts and employee reminders to improve attendance, tardiness and unnecessary overtime conditions.
Job costing An advanced feature, job costing uses historical data and intelligent analytics to determine how many man-hours a project will require. This helps to eliminate the guesswork associated with the estimating process.
Payroll integration If the system doesn’t have a built-in payroll application, it should integrate effectively with your company's payroll system to ensure the speed and accuracy of payments and accounting. (If you're looking for a dedicated payroll system, see our guides on payroll as well as payroll products designed for Mac.)
Labor regulation management Ensure people are taking their breaks and are rotating as required through legal or safety regulations. Keep track of data for reporting and compliance purposes.

What Type of Buyer Are You?

Generally speaking, time and attendance tracking software buyers fall into one of the following categories:

HR departments. If you’re purchasing software for an HR department, take a look at our HR Software Buyer’s Guide, which lists all the features associated with these types of programs. Time and attendance management could be one of many functions you need: your ideal system might include benefits admin, applicant tracking, employee education and many other features HR professionals will find useful.

Workforce administration buyers. This is where smaller buyers typically find themselves. Your company has grown, but you haven’t quite reached the level where you need a complete human resources management system. You do, however, want time and attendance tools that feed into your payroll, possibly with a scheduling or job costing tool as well. Products to consider include Kronos Workforce Ready or TimeForce.

Self-employed/solopreneur. There are a number of vendors that offer free employee time clock software—both computer-based and smartphone-based—for individuals looking to make more efficient use of time. Even with added features like job costing, a low-cost solution like Tsheets should be all the solopreneur needs.

Market Trends to Understand

Prospective buyers should keep the following market trends in mind as they search for a time and attendance system:

  • Software as a Service. With the adoption of Web-based subscription software on the rise, some of the best time tracking software is available through this delivery mechanism. Look for Web-based time tracking software to rise in popularity as the market expands.
  •  
  • Service-based economy. The service sector has grown rapidly over the last century, as evidenced by the rising number of service companies in the Fortune 500 and the fact that the service industry grew exponentially in the last century—from 31 percent of all U.S. workers in 1900, to 78 percent in 1999. Service companies need more innovative ways to track employee productivity and output than the resource or manufacturing sectors, which is why these kinds of tools are so popular right now.
  •  
  • Flexible work arrangements (FWAs). According to a report by WorldatWork, over 75 percent of companies in North America offer FWAs as a competitive benefit for their employees. Popular flexible arrangements include telecommuting, e.g. working remotely, and “flex-time,” or allowing employees to start their workday earlier or later than the traditional 9am-5pm schedule. For companies offering FWAs, the ability to accurately track employee time is critical, especially for non-salaried employees.

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