PAYTECH

Time and Attendance Trends for 2004

January, 2004
By Monty Montgomery and Kathleen Sturgeon

Automated time and attendance systems continue to make inroads in organizations of all sizes as employers discover the benefits of eliminating paper timesheets and old-fashioned punch cards.

The last few years have seen a boom in electronic time collection devices, including biometric, Web-based, wireless, and hybrids that aren't easily categorized. The march toward automation doesn't mean that time clocks and badge readers will disappear any time soon. On the contrary, new technology is actually breathing life back into several older devices that were predicted to disappear from the marketplace.

Trends indicate that automated time and attendance systems are evolving as functionality moves from client-server systems and time clocks to Web-based systems hosted by service providers. In settings where time clocks still dominate, they aren't the "punch clocks" of the past, but rather high-tech marvels that incorporate modern electronics in a functional and familiar package. Despite the growing prevalence of Web-based applications and the continuing popularity of traditional systems in some industry segments, biometric devices that combine time collection and security in one unit are emerging as the clear choice for many companies.

Booming Biometrics

Biometrics - systems that verify a user's identity based on a physical characteristic - have been around for a number of years as security devices. Over the last few years, biometric time and attendance systems have emerged as a means to streamline the typically labor-intensive, paper-heavy task of collecting and reporting employees' worked hours. Available in several formats, including facial, voice, and fingerprint recognition, hand geometry, and others, biometrics are readily adapted to time collection because of the tasks they integrate.

Their original role as a security measure cannot be overstated. Security is a major issue for businesses of all sizes today, and biometrics are at the forefront of the movement toward better workplace protection. Because time collection terminals can be programmed for physical access control, time and attendance is a natural extension for biometrics. "Biometrics, such as hand scanners and fingerprinting, have become one of the fastest growing segments of the industry," said Karen Pitassi, Director of Product Marketing for ADP Employer Services. "Biometrics allow management to be fully confident that the person entering time cannot falsify his or her identity, thereby eliminating fraud."

Likewise, biometrics alleviate the costly practice of "buddy punching" where one employee clocks in for another to credit the absent worker for time not worked. Traditional time clocks can only verify a card or badge, not the person using them. With biometrics, buddy punching is not an issue - a person's body is his or her "card." The elimination of buddy punching has prompted many larger companies to adopt biometric time and attendance solutions. "We use a biometric hand reader," says Dennis Danilewicz, CPP, Senior Director of HR@BMS and Payroll at Bristol-Myers Squibb Company. "It reduces the cost and effort of maintaining cards and eliminates any chance of buddy punching."

Even though biometric devices are efficient and simple to operate, some employers view the technology with suspicion. Danilewicz said his company had difficulty convincing employees to use it. "It [biometrics] was hard sell to individuals who needed to feel assured that we were not capturing and recording fingerprints," he said. "Once they became accepted and were in use, most people seemed to like them." However, objections based on religious beliefs, along with questions about sanitation, have dogged biometric terminals for years and continue to be an obstacle to their implementation.

Besides employee buy-in, cost has been one of the biggest stumbling blocks to biometrics' acceptance. According to Bill Spence, Director of Marketing for IR Recognition Systems, prices have decreased to the point that biometric devices are becoming more widespread in businesses of all sizes. "Lower cost biometric terminals at user prices below $1,000 are coming to market and broadening the use of biometric terminals in the low-end market," he said. "Larger corporate concerns are asking for and installing biometric terminals. Significant growth is being seen, especially in the hospitality and food service industries." Aside from its application in businesses with large numbers of hourly workers, biometrics are finding their way into the white-collar world as well. Professional employees tend to view biometric solutions as security devices rather than ways to punch in and out, which makes implementing biometric time collection devices easier.

What does the future hold for biometric time and attendance solutions? According to the International Biometric Group's Biometric Market Report 2003-2007, total annual global biometric revenues for the physical access/time and attendance sector (the report does not break the categories out separately), is projected to reach $245.3 million in 2004, up from $163.5 million in 2003. ADI Time, a provider of biometric devices, projects the worldwide biometric market will increase at an annual rate of 50% through 2005.