How Can Time Tracking Benefit Your Bottom Line?

In a workplace where we're constantly distracted by the ping of new text messages, e-mail pop-ups, ringing phones, and social media notifications, it's easy to feel pulled in multiple directions.

Study after study indicates that multitasking is one of the least efficient ways to use our time, as each time we switch to a new activity, it takes time for our brains to switch gears. Tracking your time during the workday can give you a clearer picture of how you're spending your time, as well as more accurate sense of how much time you are allotting to particular projects or clients.

There is a range of options for tracking your time. Many are Web-based, so you can track the time spent at the office from your computer, or at home or on the road from your smartphone. Most programs offer a system for identifying specific tasks and individual clients, so users can quickly choose a label and start the timer. For example: Here at Serendipity Media, we publish multiple magazines, send out weekly e-news blasts, and market special events. Using our time-tracking system, employees note their activity and which publication or organization it was for. It allows our management team to review how much time is being spent to meet each client's needs, ensuring that we bid jobs appropriately.

On a more personal level, time tracking also helps employees to be more aware of their tendencies to multitask. Switching categories on your time-tracker every time you switch tasks has a tendency to make employees realize just how often they're changing gears. Devoting uninterrupted time to task completion, rather than frequently switching tasks, has been shown to increase productivity.

While some employees may initially balk at the "Big Brother" factor of time-tracking, it can actually work to their benefit, especially in cases where a supervisor underestimates the amount of time a project will entail. The time tracker provides evidence of the real amount of time needed, which may help with planning, moving forward.

Toggl, one of the more popular time-tracking software makers, offers these suggestions to help employees see time-tracking as a good thing:

• Avoid complicated systems. Time tracking programs are often pitched and sold to accountants and/or top management. This often means systems resemble your tax return—and they're equally difficult to complete. Ask yourself if the system is easy enough for the average user who has to fill the thing in every day.
• Set an example. There is nothing less convincing than the manager who forces time-tracking on others but doesn't do it himself. In a similar spirit, you need to convince other senior managers to time track, as well.
• Fill in hours immediately. People who fill in their hours once a week, have a serious risk of under-billing. Or sometimes over-billing, which may of course feel nice for a moment, but may not be a sustainable business model. It is also rather frustrating to track time only once a week—you need to find all these notes and check your calendar to find the data. So, the best way to track time, is to track it constantly or at least as often as you have something ready.
• Promote honest hours. The first, and some argue the best, benefit of tracking time is to get an understanding of where all that time is going. Forcing people to bill eight hours a day doesn't work in many settings—some will have a tendency to turn their time at the gym into billable hours. If you want a true picture of efficiency, make sure you create an environment where people are free to report honestly.
• Discuss the results. Time is factual, which means that you can talk about it without getting too opinionated or emotional. This is great for giving feedback. Share the results with your team on a monthly or quarterly basis. It helps everyone use their time more effectively, and the meetings can often serve as catalysts for major improvements in efficiency.
• Tie implementation to bonuses. Positive reinforcement tends to be better than negative reinforcement, and punishing (by, for example, not paying someone's regular salary) for not tracking can have serious backlash elsewhere.
• Track even if you do not bill. Not everyone bills by the hour, but internally it is still important to understand what is the cost of an hour to you. Time-tracking is a good tool to understand the real cost of your service and it can teach you things about you that you did not know.
• Expect culture change. Time-tracking rationalizes and monetizes relationships inside the company. Even if people do not see each other's numbers, it secretly forces people and teams compete more, which is a good thing but may also lead to silo effects. Accept that this may happen and be prepared to counter with teamwork incentives. If you absolutely don't want to do this, don't time track.
• Go totalitarian! Of course, you can always employ draconian measures to force people to track time. But then don't be surprised when they clam up as you approach the water cooler or Dilbert strips are glued to their cubicle walls.

For reviews of various time-tracking software, click here.