Best practices: What time tracking tool should I use?

The complexity of choosing a time tracking tool can be boiled down to a trade-off between two factors: convenience and functionality.

Typically - but not always - greater functionality leads to better results. Better results, that is, in the form of more accurate data, more detailed output, and greater transparency on problems ahead of time.

Convenience, however, is also important. Going too far in the direction of functionality can lead to a system that takes up a significant amount of time in its own right! Training, misalignment on   usage, system outages - not to mention employee fatigue owing to the cognitive strain of continuously interacting with a complex system - should all be set against the additional benefit the functionality brings.

In other words, in order to select the right technology, you need the minimum necessary functionality to achieve your goal as a manager, business owner, or team leader. Anything more will not only lead to diminishing returns but may ultimately deliver net negative results for your firm’s efficiency, finances, and even culture.

Keep this principle in mind as you consider the different methods, and you won’t go far wrong in your choice.

By asking employees to log when they enter and exit the workplace using a card or some other device, employers can get an understanding of how long people are spending at work and confirm attendance and absences.

Originally this was achieved by means of a mechanical punch card. Modern methods can incorporate elements of biometrics to ensure that the employee is actually present (and not being ‘swiped in’ by a colleague). With ‘geofencing’ technology, it is also possible to designate workplace boundaries on a more flexible basis, for example, if a team works across multiple, shifting locations.

• High compliance: Swiping in requires little effort on the part of the employee (as they would be showing up to the workplace in any case), and hence the data is essentially gathered automatically, with no ‘chasing’ required to ensure the data is correct and up to date.
• Comparability: Since everyone is following the same system and there is no subjectivity involved, it is possible to identify persistent behavior patterns, such as the employee who always has an ‘emergency’ on the way to the office leading to a late start.

• Limited scope: In its original “factory floor” environment, punch-card data faithfully confirmed the attendance and working hours of the labor force. However, the method is potentially less relevant in an age of remote work where ‘absence’ from the office does not necessarily mean that the employee is not working.
• Limited granularity: The data shows the amount of time spent, rather than how the time was spent. An efficient employee may show up as spending less time in the office than a less productive employee who spends more time on social media than actual work.

The swipe card method is ideal in environments where on-site presence is mandatory (such as physical labor) and productivity can be measured by some means other than attendance data, or can be observed easily by team members. It makes less sense in desk-based jobs where individuals are often working alone, or are frequently traveling (e.g. consulting), although the data is still of some value as part of a broader set.

This approach can be as simple as taking a blank sheet of paper and making a note of the time whenever switching tasks. Some people prefer to buy special sheets that divide the working day into 15-minute increments, with space to annotate how each segment was spent. Another alternative is to make a list of activities and keep a record of the time given to each using a stopwatch or one’s phone.

Typically, the pen and paper method is best used as a real-time or daily exercise, rather than on a per week or per month basis.

• No technology barrier: The ‘technology’ required for this method is cheap, available, and in no way dependent on the internet!
• Richer data: Compared with less granular methods such as swipe cards, thinking in terms of minutes and specific activities allows greater precision and more insights into how you spend your time. The act of more detailed observation, in and of itself, is likely to boost productivity.

• Comparability: Output from this process may be difficult to compare as users can enter data in different ways, whether this means using different categories, or following different conventions in how they annotate the paper. This makes collation for analysis difficult in a multi-person team.
• Hard to share, easy to lose: A physical piece of paper must be scanned, sent, and transcribed in order to be included as part of a broader dataset. Meanwhile, it can be damaged or misplaced more easily than an electronic file.

The pen and paper approach does not scale well to multi-person teams, but could be ideal for individuals who have just begun the process of tracking time, and do not wish to go all-in with one of the other methods until they have a sense of how their time breaks down. As it has fewer constraints than other methods, it is ideal for experimentation. A firm owner who is considering introducing time-tracking might begin using this method. A solo freelancer who intends to remain a one-person firm might opt to use it continuously.

In this method, which is still very popular in certain industries, a team or an office appoints a custodian who is in charge of ensuring that the time data for a given period is gathered from each team member and entered into a master spreadsheet.

Traditionally, this was done with separate Excel files, although now with Google Sheets it is possible to have a single version that everyone updates simultaneously (assuming that the time data is not confidential to the individual team members).

• Common format: Since everyone is working to the same template, it is possible for a manager to define clearly what level of detail is required (e.g. categories of activity), and to update this over time.
• Easier to use data: With the data in electronic format, it is simpler not only to share it, but also to perform analysis within Excel and to export it to other documents such as Powerpoint.

• Limited functionality: Time tracking with spreadsheets is usually limited to retrospective estimates of time taken for a fairly straightforward set of categories (specific client projects, and some other labels such as Admin or Bus Dev).
• Cumbersome to analyze: While having data in electronic format is better than having to manually copy from a piece of paper, the analysis of data will be a manual process, requiring time and labor on the part of the manager responsible.

If the nature of a team’s workload does not vary from week to week, and the aim of time-tracking is mainly to keep an eye on a few metrics (e.g. utilization and billability) and to enter in data weekly rather than daily, the spreadsheet approach is probably good enough.

The only proviso is that there must be sufficient time allocated to manage the process, as the sheet will not manage itself. For example, this could work for a consulting team that is largely project-focused and for whom the billing is not directly related to hours worked (i.e. time-tracking is largely for internal purposes).

There are a wide variety of time-tracking apps, all with different groups of features.

It is typically a dedicated software, with the ability to support a team of individuals using a common set of time categories, as well as provide analysis. It generally includes some or all of the following features:

• Timer: A built-in timer means that if the user chooses, it is possible to measure time down the minute. While some timers are capable of automatically tracking certain kinds of activity (see ‘The Future’ below). This higher level of detail comes at a cost: users must remember to stop and start the timer and select the right category (some may not!).
• Calendar view: Users can view how they have spent their time in calendar format, with the various blocks of time like appointments, colored differently by activity. Because it is visual, it is easy to spot mistakes (such as gaps or overlaps). Actually tracking time this way is possible, but quite ‘mouse-intensive’, for those who prefer to use a keyboard.
• Timesheet: The app will also typically allow users to input or view the data in a standard tabular format, with rows for different entries. As means of tracking time, this works best for those with a predictable, repetitive work schedule that can be ‘cut and pasted’ with a few minor edits.
• Mobile app: Because apps are generally cloud-based, the software itself can be accessed on multiple devices, including mobile phones. It may have reduced functionality compared to the desktop version, but it is obviously useful for tasks outside the office. Mobile apps often come with reminders that notify the user if they have forgotten to start or stop the timer.

The four features above can co-exist in the same app. It may be that users have a choice as to how they track time (timer, calendar ‘drag and drop’, or timesheet entry). The calendar view and timesheet view are also useful as ‘outputs’ when it comes to analyzing the data.

• Dedicated tool: As a system designed specifically for the purposes of tracking and analyzing time, a time-tracking app will offer maximum functionality compared to other options.
• Ease of use: All other things being equal, it is typically less cumbersome to use a time-tracking app to achieve one’s goals (assuming that these goals are reasonably sophisticated).
• Wide choice: While few time-tracking apps work for everyone, there are so many different options available that there is almost certainly one that meets your needs.

• May not be free: There are many free time-tracking apps out there, and many premium apps that have a free version. It is however possible that the app you want and the configuration you require (e.g. multi-member) may come with a one-off or periodic fee.
• Some learning required: Because you are using a system that someone else has developed, there may be a learning curve, particularly if the functionality of the tool is rich. If you are working on a team, everyone will need to get up the curve for the system to work.

If accuracy is important - for example, if billing clients by the hour is a large part of your revenues - and/or you are occasionally required to justify either a bill for work done or make an estimate for a proposed job, a dedicated time-tracking app may well make sense.

If your workers do not have systematic, predictable work, it may be worthwhile investing in a time-tracking system to maintain visibility on how employees are spending their time, both billable and non-billable.

Finally, if your employees typically work in teams and across disparate locations, including working from home, working with a time-tracking app will enable you to maintain a cohesive picture of how the team is performing, who needs help, and who is in a position to give it.

The internet, and in particular cloud-based technology, has enabled time-tracking to evolve far beyond the days of pen and paper, and this process of evolution is ongoing. New innovations include the addition of voice-activated technology such as smart speakers, and automatic tracking (i.e with no human input) software that observes user movements and logs time accordingly.

While some of these innovations will doubtless be incorporated into mainstream tools in the future, at this point many are untested and lack mature use cases. Some professions, for example, may be unable to use smart speakers owing to confidentiality concerns.

As for ‘automatic’ time-tracking, outside of narrowly defined tasks such as logging time spent on certain websites or time spent with certain clients, AI is also some way off achieving the ability to handle task categorization with the required level of nuance. Rushing into these solutions may end up becoming a costly experiment that leads, ironically, to more wasted time.

The conclusion is that it is best to use tried-and-tested methods if you want to be reasonably certain about the results. Most of the methods mentioned above are either time-tested or built on common sense. So far as experimental technology is concerned, most business owners and project managers are likely to wait and see which methods take hold.