A new report from Nucleus Research finds that using biometrics, especially hand geometry, to automate collection of time and attendance data can reduce payroll errors, manual data review and correction time and buddy punching — the practice of one employee signing in or out for another. Three out of four companies experience loss from buddy punching.
Nucleus identified a number of benefits that companies could achieve from deploying biometric technology to support improved labor and payroll management. Key direct benefits include reduced payroll error through elimination of employee fraud and reduced material costs. Indirect benefits included increased productivity, improved management reporting and visibility and improved legal compliance.
The report looks specifically at the Schlage HandPunch, a biometric device that uses hand geometry to increase reliability and reduce privacy concerns. Rather than identify users by means of a palm print or fingerprint, which can be unreliable and often requires manual intervention by the payroll administrator, the HandPunch registers the three-dimensional shape of an employee's hand and stores it in the system as a unique string of numbers. Employees enter a pin number or card and lay their hand on the reader to track their time worked, greatly reducing payroll error. Nucleus found that companies moving from fingerprint scanners to HandPunch technology were able to increase accuracy by at least 50 percent.
The average payroll error rate is 1.2 percent of total payroll. Automating time and attendance and ensuring accuracy can reduce payroll error considerably. Additionally, HandPunch enables managers to have better visibility into employee work habits and locations — resulting in better tactical monitoring as well as improved audit capabilities. An accurate, auditable time and attendance tracking system can reduce the costs and liabilities associated with ensuring compliance with employee regulations and union rules and reduce the potential cost of fines or legal action.
"Companies should consider investments in time and attendance applications as a low-risk, low-cost way to reduce payroll costs and improve productivity,” said Rebecca Wettemann, VP of Research for Nucleus Research. “Advanced biometrics, such as those that use hand geometry, can greatly improve accuracy and virtually eliminate buddy punching for even greater ROI.”