Time Tracking Solutions for Temporary Staffing Agencies

eCapital Corp

Last Modified : Jan 23, 2024

Fact-checked by: Bruce Sayer

Just like a coin has two sides, staffing agencies have two main functions – hiring productive workers to fill job positions and conducting the administrative management of those workers. The tools and processes to track, monitor and report on your team of employees should never be a cookie cutter solution that is provided to all clients without considering their company’s exact requirements. Time tracking is a vitally important metric providing the ability to monitor and analyze employee performance plus ensure the accurate administration of wages. The best time tracking system to choose for staffing agencies has to be versatile enough to meet the needs of client companies in various industries and at various locations. In this article we discuss the requirements of the best time tracking solutions for temporary staffing agencies.

Once staffing agencies place recruits in job positions, the primary responsibility to the employee and to the client company is to ensure accurate wages – that the employee isn’t underpaid or overpaid, that they are paid on time and for the exact number of hours they’ve worked at the clients’ workplace. The agency’s timekeeping solution must also ensure that their clients avoid any fines, back payments, or penalties as a result of poor timekeeping or noncompliance with government payroll requirements.

Temporary staffing agencies must keep accurate records of employees’ work hours to invoice clients and administer wages, but there is more involved. Staffing agencies need to measure individual employee performance to monitor productivity and gauge value to the client.

For most companies that manage their own staff, time tracking is a straightforward process. Only a few complexities need to be accommodated for, such as tracking employees who punch-in early or leave late, travel for business, participate in company trainings, and use mobile devices to remain connected to work after-hours. For staffing agencies, timekeeping is complicated by the need to manage a work force spread out and integrating with multiple client company systems and locations. To manage the diversified work conditions, expectations and reporting needs of your various clients, temporary staffing agencies need a more versatile solution.

Essential Requirements of Time Tracking Systems:

Timekeeping accuracy: It is best practice to track employee’s time worked to the minute. If for reasons of uncertainty or inefficiency, the Fair Labor Standards Act (FLSA) permits employers to round the time worked by individuals to the nearest 15 minutes. This practice must be applied fairly not to consistently favor the company. It is important to note that some states place limits on time rounding. Be sure to become familiar with the labor laws governing your service area and comply accordingly.

Record all time worked: Work force conditions have changed dramatically over the past few years, and especially following the disruptive nature of the pandemic. It is not unusual for employees to work outside normal core hours and often from out-of-office locations. Time spent to engage in work-related emails, check phone messages and perform other tasks, whether on or off the company’s network must be considered compensable.

Travel and training time: Employers must pay non-exempt employees for all time spent on job-related tasks. This includes work performed outside of normal hours plus certain non-productive time such as work-related travel or training. Make sure your agency is up to date with the rules on compensable training and travel time and instruct employees to record their time accordingly.

Important Note: Employers must pay non-exempt employees for all time worked whether it was authorized or not. Other disciplinary actions can be taken if an employee disregards company policy to be approved prior to working extra time, but once worked the employer cannot withhold pay.

Meal periods: Time records need to accurately document when employees take meal periods, how long the period lasted, and when the employee returns to their duties. For a meal period to be unpaid, the employee must be relieved of duty for a period no less than 30 minutes without work interruption. If work disrupts the allotted 30 minutes, the employee should be paid for the full meal period or the time should be reset to allow a full 30 minutes following the interruption. Some states have meal period recordkeeping requirements that demand actual time tracking as opposed to automatic deduction of meal periods – check your state law for compliance.

Historical documentation: Employers are required by law to archive records on which wage calculations are based for at least two years. Payroll records including hours worked must be kept for three years, and records for federal tax purposes must be held for at least four years.

When choosing the best time tracking software solution for temporary staffing agencies, ensure it is robust enough to accommodate all the above listed requirements yet flexible enough to allow tailored formatting. Most time tracking software is designed to be used with a single industry – choose software that allows you to easily change the default settings to better represent the industries your employees work in. For easy reporting to clients, ensure the system has the ability to filter data by employer and employee to create custom reports rapidly. This makes reporting efficient, easy to manage and more meaningful to your client.

How Do Time Tracking Software Programs Work?

The best time tracking systems maintain security and accuracy by ensuring employees use a unique code to log in and out of the system. Once the employee has logged in the system tracks hours down to the minute and will provide real-time data to facilitate the management of productivity. Detailed recordkeeping is essential, not only to monitor employee output, but also to meet government regulatory requirements. Further features, such as dashboards to manage multiple clients and automated alerts to signal when employees are getting close to overtime simplifies timekeeping when managing a team of temporary staff. The automatic calculation of hours and wages performed by these systems saves time and eliminates the chance of human error. It is important to find a software solution that has the flexibility enough to manage the needs of multiple client company’s each with unique requirements.

How to Choose the Best Time Tracking Solution for Temporary Staffing Agencies

The best time tracking solutions have metrics that turn task timelines into visual data to show total time to complete a task with details on how that time was spent. Monitoring of meetings, project tasks and client feedback sessions that happen throughout the day provides the opportunity to analyze workflow, look for system gaps and expose inconsistencies that occur between your employees’ ability to perform tasks. Whereas some employees may take a full hour to complete a routine task, others may accomplish it in only 30 minutes. This may indicate the need to standardize processes, improve training, or both.

To assist with your search for the best timekeeping solution for temporary staffing agencies, use the following links:

Compare product features and ratings to find the right time tracking software for your organization.

Capterra – Time Tracking Software

PCMag – The Best Time Tracking Software for 2021

Zapier – The 5 best time tracking apps of 2021

For comparison of more robust software that includes recruiting features:

Capterra – Recruiting Software

G2 – Best Staffing Software

Temporary staffing agencies must keep accurate records of employees’ work hours and have the ability to report in a meaningful manner to their client companies. This would be a straightforward process if not for the diversity of companies your employees are assigned to, the various work conditions they are governed by and the various industries they need serve. Do your research well and choose the best time tracking solution to meet all the complexities of temporary staffing agencies.

eCapital Commercial Finance has strong ties to the staffing industry. We know staffing agencies – their financial needs and the many barriers that must be overcome to be successful. Our industry-experienced staff offer more than flexible funding solutions to keep cash flowing, we also provide back office support and help in whatever manner we can provide.

Following are more helpful articles on how to run a successful temporary staffing agency:

• A Guide on How to Start a Temporary Staffing Agency
• How Invoice Factoring Can Improve Your Staffing Company Customer Relationships
• Payroll Funding – What It Is, How It Works, and Its Advantages

For information about funding solutions, cash flow management or for more helpful tips on running successful temporary staffing agencies, visit eCapital.com

eCapital Corp

eCapital Corp. is committed to supporting small and middle-market companies in the United States, Canada, and the UK by accelerating their access to capital through financial solutions like invoice factoring, factoring lines of credit, asset-based lending and equipment refinancing. Headquartered in Miami, Florida, eCapital is an innovative leader in providing flexible, customized cash flow to businesses. For more information about eCapital, visit eCapital.com.