Time Tracking for Small Businesses: The Challenges and How to Overcome Them

A clock on a desk next to a pen and a notepad symbolizes time tracking for small businesses.

In small businesses, there’s often a tendency to stick to traditional timesheets. Sometimes, working hours aren’t documented at all, either because it’s deemed unnecessary or because employees resist it.

In the EU, the situation is serious. Since a ruling by the European Court of Justice (ECJ) in May 2019, tracking of working hours has been mandatory. 

Although this topic is still often neglected:

In fact, recording of working hours has been mandatory in the EU for 5 years.

This applies not only to large corporations or from a certain number of employees. This obligation also applies to small businesses. In the event of a legal dispute or an audit, small business owners are also affected.

Although small businesses with 10 or fewer employees are still allowed to record working hours on paper, there are two essential aspects to consider:

  • Paper-based time recording is prone to errors, poses privacy concerns, and timesheets can simply be lost.
  • Experts predict that digital time recording will become mandatory for small businesses in the medium term. Keyword: digitalization.

Digital time tracking for small businesses often proves difficult. Employers and employees face challenges that need to be overcome.

Based on extensive discussions with prospects and customers, we have identified and addressed the 5 biggest difficulties.

The digital time tracking for small businesses of absence.io on a smartphone and a tablet.

A time tracking system is too expensive.

We often hear this argument. The costs for software and hardware, plus maintenance and training of employees, exceed the financial capabilities of a small business or “it’s not worth it.”

However, it depends on the type of time tracking. If you equip yourself with a digital time clock, including software that needs maintenance and updates, plus corresponding tokens for the employees, it can indeed become very expensive.

But: It doesn’t have to be. At absence.io, you get digital time tracking + digital vacation and absence management starting at 4€ per user. For a maximum of 5 employees, that’s at most 20€ per month. Setup, maintenance, updates, and even customer service are included for free. You also don’t need expensive hardware because the time tracking runs via a laptop or smartphone app.

It’s too complicated.

“Traditional” companies often resist a digital solution because they find software solutions complicated. “I’d rather stick with my time sheets.”

But: Even employees in their late 50s or early 60s are well acquainted with computers and software. According to a study, e.g. 88.8% of Germans have a smartphone. In the age group 50-59, it’s even 92.8%. The trend is increasing.

Anyone who can handle a smartphone can also operate absence.io. The software is very intuitive and ideally, you simply tap “Start” and “Stop” on the digital stopwatch at the beginning of work, during breaks, and at the end of the day. Super simple.

My people won’t go along with it.

“Yes, the young ones might, but Harry won’t adjust in his last years!”

We often hear this. Employees with long tenure are often set in their ways, even when it comes to time tracking.

But: This should not deter you from implementing time tracking software! Your company won’t end with Harry’s retirement, and always keep in mind: Digital time tracking is affordable and, unlike paper timesheets, reliable and secure, whether Harry likes it or not.

What about data protection?

In recent years, data protection has become the specter of the business world. We receive many inquiries regarding employees’ personal data and data protection.

Small business owners often have concerns about software solutions that collect employee information and other data.

But: In terms of data protection, there is nothing safer than a certified software solution. Especially for software companies in the EU, compliance with the General Data Protection Regulation (GDPR) is essential. Those who do not strictly follow the rules lose.

Harry’s data is much safer stored in our software than on his timesheet.

We don’t know how it works legally.

A surprisingly common phenomenon is that small businesses, uncertain about the specific legal situation, simply do not record their working hours at all.

But: This is the worst decision. The rulings of the ECJ do not differentiate based on company size. There may be isolated exceptions, but generally, every company must record the working hours of its employees, whether it’s Microsoft or Jenny’s Nail Salon with three employees.

Therefore, small businesses should definitely use software because it takes care of all legal requirements. The company only needs to start and stop the work time.

Conclusion: Time tracking for small businesses is affordable, safe, and mandatory

Every company in the EU is obligated to record the working hours of its employees.

  • For small businesses, there are software solutions that are:
  • affordable
  • uncomplicated
  • data protection compliant

legally compliant.

With absence.io, you get a solution that meets these criteria. With our free service and support, we are always ready to help you.

You can either explore our software for 14 days for free or schedule a free consultation appointment with our product experts directly. We will answer all your questions and support you.

Image in hero by freestocks.

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