6 reasons for time tracking in the workplace and everyday life

"It's not that we have too little time, but too much time we don't use." (Lucius Annaeus Seneca)

A wise statement that describes the occasional pangs of guilt or reflection in the evening when we ask ourselves: Did I handle my tasks well today? Did I make good use of my time? But what does it actually mean to "use time correctly"? We shed light on the matter and have taken a closer look at time tracking as a possible approach to optimizing time management."

Time Tracking as a benchmark for time management

Whether in the workplace or in private life, those who manage their time well and use it wisely are already one step ahead of many people. Time tracking can help you accomplish more and feel better about it. But how do you actually track your time? And what should accurate time tracking achieve? The answer lies in time-tracking tools, which are probably the best and simplest way to track work hours in the digital age. For users, the primary goal is to gain a better understanding of their own time, both personally and professionally. This can lead to numerous optimization possibilities for both companies and employees. Only when we know how we spend our time can we optimize our time management.

Would you like to learn more about how to organize your time wisely? Get to know 5 time management methods that will help you use your available time effectively.

Time tracking in companies: The time-cost factor

For every business, the old adage holds true: time is money. However, this well-established principle, honed over many years, is not the only compelling reason for time tracking in the workplace. It's more about improving the organization and collaboration within a company and among individual teams, and this improvement is achieved through data. The size of a company doesn't initially matter. From large corporations such as insurance and telecommunications companies to consulting firms and IT service providers, many businesses' employees' working hours represent the most critical, expensive, and simultaneously scarce resource of the company. Time tracking offers numerous opportunities to optimize processes and projects in a resource-dependent manner. Especially for rapidly growing companies, precise time tracking provides valuable insights for process optimization.

Legal requirements for time tracking: The European Court of Justice has ruled that time tracking is mandatory. Employers from all European Union countries must systematically record the working hours of their employees. This primarily serves to protect employees, for example, to prevent overtime. However, according to the Federal Data Protection Act, an employee has rights to information. Thus, the employer is also obligated to grant the employee access to the documentation of their working hours. With a tracking tool, an employer essentially accomplishes two goals in one.

Is time tracking used to control employees?

From our perspective, yes and no. Of course, time tracking is a form of control, but it's more about how this control is perceived by the employee. Does the employee feel that they are being closely monitored through time tracking? Or do they have the individual freedom to structure their day as they see fit? In a way, time tracking serves as self-monitoring for self-improvement.

The company culture plays a crucial role in this regard: an open culture that embraces learning from mistakes provides the best conditions for improving processes as a team. It's not about finger-pointing or blaming someone for not meeting deadlines. Instead, the goal is to use data from time-tracking tools to identify the reasons a project might have exceeded its timeline. Subsequently, solutions can be found, and processes can be optimized collaboratively.

Many people, especially employees, have negative associations with time tracking, particularly when it comes to tracking work hours. This may be due to the fear of control undermining trust in the employer. However, in reality, the control of working hours is not the primary reason for companies to use time tracking tools. What truly convinces is the knowledge employees gain about their own work hours because those who have precise data about their time management can optimize their work, processes, projects, and daily routines on multiple levels.

KNOW YOURSELF - time tracking as a data source: Time tracking primarily serves as a data source for analyses aimed at optimizing business processes within companies. The knowledge provided by time tracking tools can lead to long-term improvements in both company and employee time management.

6 reasons why time tracking is so important

In addition to the obvious benefit of continuously and accurately recording working hours, digital time tracking in teams offers a multitude of advantages. Here are six reasons why time tracking can be beneficial for both companies and employees.

1. Enhanced daily productivity

Phone calls, internet surfing, coffee breaks, or mobile distractions considered time-wasters? Not necessarily. If a workday is to be productive and efficient, it includes taking conscious breaks, occasionally disrupting routines, and clearing one's mind. Apparent distractions are not necessarily the main drivers of unproductive work. Time tracking tools can provide more accurate data on where time is lost and where it can be better planned. Using a time-tracking tool gives teams a precise overview of the time spent on ongoing projects. Employees can identify bottlenecks in their daily work and, based on time-tracking data, develop and optimize new routines.

2. Transparency in all directions

Through time tracking tools, management gains automatic, transparent insights into the workload of their company or teams. Recognizing bottlenecks allows resources to be increased and made available in a timely manner. Timely communication with the client regarding schedule changes significantly improves project progress. As time goes on, planning for recurring processes becomes more manageable, and employees ultimately benefit from time tracking: recurring processes become more efficient, predictable, and aligned with the employees and their competencies.

3. Precise billing and smooth payment

Accurate time tracking enables transparent cost breakdowns, which are highly understandable for clients and, ideally, leave no questions unanswered. Did the last project actually pay off? How much time was spent on which phase (Pre-Sales, Sales, Implementation, Decommissioning, etc)? What conclusions can we draw for future projects and processes? And were all hours correctly billed? Questions that need not be a source of concern when using the right time tracking tool. When every employee records their working hours per project, the billing aligns with the actual work done. Clients can be informed in advance whether projects will be completed within the planned time or if more time is needed. This proactive approach allows for adjustments to expiring project budgets and quotas. Moreover, time tracking enables team members to support each other in a timely manner to meet deadlines.

4. Enhanced planning and project scope adherence

Especially for project deadlines, time-tracking tools are essential for setting and meeting deadlines. Team leaders can better prioritize future projects and team capacities. Additionally, unexpected expenses and additional work that was not foreseen before the project began can be accounted for with a time management tool. This makes it easier to keep track of service provider work efforts and customer costs, which remain understandable and fair. Project budgets and quotas can be better maintained, and if a project does not yield the expected returns, priorities can be reassessed, and processes can be optimized.

5. More responsibility and motivation

Success requires motivation, particularly motivated employees. Therefore, it's crucial that each team member feels valued and receives recognition for their work. When time tracking is used correctly, processes can be continuously improved based on data. This means that employees who track their working hours and optimize processes based on data collectively influence business processes. They are not held responsible for missed deadlines here, we return to the theme of an open culture of learning instead of finger-pointing. Instead, data is analyzed, employee feedback is appreciated, and solutions are implemented together. Time tracking can thus also serve as a motivator for employees, supported by clear responsibilities, improved communication, and ultimately, more enjoyment in and of work.

6. Improved employee morale and team building

Better planning, increased transparency, data-driven optimizations, and the overall improvement of work processes and responsibility result in not just improved figures but also a better working atmosphere. Who doesn't like working when everything runs smoothly? The essence of this is that employee morale rises. Furthermore, employees frequently exchange information, assist each other, and form a strong team. The tracking tool is practically a communication channel available to everyone, driving the entire team forward. Therefore, teams can improve both their collaboration and communication deliberately through the "feedback" from the tracking tool.

Conclusion

Time tracking in the workplace is a guarantee of increased productivity and optimized processes. Teams, in particular, benefit from meaningful data to continuously boost their communication, workflows, and overall collaboration. Additionally, time tracking has a positive impact on one's daily time management, steadily enhancing one's sense of time management. Therefore, it is equally beneficial for both entrepreneurs and employees to establish a time-tracking tool.