10 May 2018

5 Reasons Time Tracking is Critical to Business Success

Being in the digital marketing industry for nearly 20 years, I’ve seen time tracking handled in many different ways. Some companies have staff log every minute they are working, while others don’t log any time at all. Vertical Measures falls somewhere in between. Our team logs any time spent on client-work, so we can continue to track how long it takes (on average) to complete specific deliverables and use that information to better our business and processes.

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Let’s be real with each other. People don’t actually like to track their time. It’s kind of a hassle and adds additional work to your already packed day. However, the advantages of time tracking for your business far outweigh the hassle it takes to log time on a project.

Today, I’m going to share with you five reasons time tracking is critical to your business success with specific examples of how you can benefit from implementing it.

1. Time tracking shows how much deliverables cost your business to complete

It costs a lot to run a business. Business owners pay salaries, taxes, benefits, building fees, software and tools, hardware, desks and furniture – and that’s just the basics. A lot of businesses also pay for additional perks, like team outings, snacks in the office, happy hours, additional training opportunities, travel, staff meals, and more in order to stay competitive with employee satisfaction.

These expenses can all add up, so it’s important to quantify what it costs your business to complete work in order to afford all these costs and still make a profit.

Obviously, time tracking is just one area that can help with this. But before you start, it’s important to understand what it costs your business to operate per employee.

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Once you have this total cost per user, use a project management software like Workfront or Mavenlink to keep track of individual hourly costs. Be sure to update this information on a consistent basis. At Vertical Measures, we update our hourly costs every quarter.

Finally, when employees time track, each hour they log gets rolled up to the project financials based on their individual costs. And voila! You’ll have a clear understanding what it costs your company to complete work for clients.

2. Track how much effort has gone into a project

Another good reason to log hours throughout the day is to track how much time you’re spending on a project. For companies that bill clients a fixed amount by project or must stay within a specified budget, it’s critical to monitor the effort that’s going into each task, so you can ensure you don’t go over hours and end up losing money.

You need to know how your work is planned throughout the day. You can base your planned hours on what you charged for the work or how much time you think you should spend on something. Once you have that, you need a method to keep track of it all. You can use something as simple as an Excel spreadsheet, but an even better method is to utilize time tracking software like Toggl or Harvest.

Both are very simple to use, cost-effective, and with some integrations, they let you input tasks with planned hours and log time directly to those tasks as the work gets completed.

3. Use time tracking data to see where your team can improve overall efficiency and productivity

Does your current project have too many layers that result in an over-complicated process? Is it taking forever to complete something, but the time isn’t justified for the type of work? Are your competitors pricing you out of opportunities?

When time tracking becomes a part of your business, you can start identifying themes in how work is getting done. By building this time tracking data, you can see how efficient (or inefficient) your workflows are, allowing you to work with your team on increasing their productivity.

Vertical Measures created a culture of continuous improvement within our processes. With time tracking data, we’re able to identify areas where a process may be broken because it has too many steps or people involved.

Another identifier is at the personnel-level. For example, someone is taking far longer to do the same task as their peer. That doesn’t mean the person is shamed. Instead, we look at it as an opportunity to work closely with that individual by coaching them on ways they can improve their overall efficiency.

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As employees track time throughout the day, they stay more engaged with the task at hand, refraining from distractions and multi-tasking, which increases overall productivity. This also creates opportunities for employees to monitor their own work habits to improve time management skills on their own.

4. Provide visibility to management to know when employees can take on additional work

Employee satisfaction plays a big part in the quality of work that’s delivered to your clients. If you’re overworking or overwhelming your staff with more work than they can handle, it will end up hurting your business in the long run. The output of their work will suffer, causing your clients to grow frustrated.

Once you have a team that logs their time, you can use the data to help make informed decisions on individual employee workload. You can look at how they’ve been tracking time and immediately tell if they can handle more work. The key here is to ensure you’ve trained your team on the value of time tracking for them to be “bought-in” and start doing it accurately and timely.

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The value of this visibility not only helps your business make informed decisions on hiring, but it also provides value to your individual employees. This is a key factor that can help others adopt time tracking throughout your company.

If your team is struggling with accurate and timely time tracking, explain how much it will benefit them. Remind your team that with time tracking, hiring managers can know when they need to hire additional staff, so they don’t overwhelm or overwork others – making for a happier work environment overall.

5. Utilize time tracking data to strategically price work for your clients

Every time you charge for a specific deliverable, ask yourself if there’s enough time to provide a quality product to your customer, while also delivering profits to your business.

Eventually, you’ll have enough time tracking data to see how long it takes you to complete a similar task. From there, you can start assessing the effort you put into each project:

  • Are you pricing these projects accurately?
  • Are you spending more time than you should?
  • Do you have some wiggle room to spend more time and deliver a higher quality product?

Having this information will help improve profitability over time as you tweak and refine to get it just right for your business.

It’s never too late to start tracking time at your company

Yes, time tracking can be a hassle, but the benefits can clearly do amazing things for your business. And it doesn’t mean you need to micro-manage your team minute by minute.

Time tracking is about making good business decisions about deliverables, resource management, and overall productivity of your staff. And as you consistently track time, your organization will become even better at identifying areas of opportunity to make you more successful.

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