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Editor's Note: Take a look at our featured best practice, People Productivity Toolkit (34-slide PowerPoint presentation). People productivity is one of the most important focus area for senior leaderships across the organization. This presentation outlines one of the most innovative and up-to-date approach to tackle people productivity with a very objective lens on organization performance improvement. The document [read more]
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For UK executives, labor has become both the biggest controllable cost and the hardest to optimize. Unit labor costs continue to trend upward, which is reflected in both pay and sustained pressure on margins.
At the same time, there’s the effect of lost hours. The ONS reports a 2.0% sickness absence rate in 2024 (hours lost to sickness/injury), while HSE attributes millions of lost days to work-related ill-health.
It’s against this backdrop that time and attendance software gives executives a pragmatic lever. Standardize how hours are captured, validated, and acted on, so overtime leakages are addressed in real-time rather than discovered weeks later.
In sectors like manufacturing, retail, logistics, and services, labor often represents one of the largest controllable cost lines. In fact, any misstep in managing hours, overtime, or absenteeism has a direct impact on the bottom line.
Unfortunately, this is becoming a trend. Over the past decade, UK unit labor costs (i.e. average labor compensation per hour worked) have risen steadily.
This increase in costs is primarily caused by rising non-wage labor costs, such as pension responsibilities, national insurance contributions and regulatory enforcements, as well as wage inflation. At the same time, margins are faced with competitive pressures and rising input costs.
However, one of the most insidious issues in labor-intensive job markets is the slow accumulation of hidden costs:
In the UK, especially, absenteeism remains a material drag: in 2024, about 148.9 million working days were lost to sickness or injury (which is equivalent to an average of 4.4 days per worker).
Then, there’s the ‘hidden’ cost of sickness and presenteeism in the UK, which has been estimated at more than £100 billion annually. While they’re often tolerated as being part of industry ‘norms’, for executives seeking cost discipline, they represent low-hanging fruit.
Ultimately, for UK employers, payroll accuracy and compliance with Working Time Regulations are increasingly non-negotiable. We’ve learnt that tightening margins and rising unit labor costs mean small defects in time capture now cascade into material overspend.
So, how can time and attendance software close those gaps? By recording, validating and actioning hours in real time.
While less commonly used today, manual timesheets are a common source of payroll corrections and overpayments. Many UK payroll professionals report recurring issues like ‘overpayment due to payroll error’ and overpayment due to late data sent to payroll’.
It’s problems like these that automation directly reduces by capturing hours at source and feeding them straight into payroll.
Secure clocking (e.g., biometrics) prevents one employee from clocking in for another, a practice UK time-system vendors have long identified as a notable driver of inaccurate records.
Deploying biometric or authenticated mobile clock-ins removes this leakage at the door (quite literally!).
Supervisors can act before costs crystallize. For example, by reassigning staff when an employee is about to incur premium overtime, or intervening when a break was missed.
Getting cost control from a time & attendance platform without denting output is mainly a design and governance task. The system must reinforce lawful, healthy ways of working – it shouldn’t be used to micromanage.
Start from legal and well-being minima, then configure rules to nudge compliance rather than penalize by default.
For example, the Working Time Regulations require at least a 20-minute uninterrupted break if someone works over six hours, alongside daily/weekly rest periods. Surface prompts that help teams meet these standards in workflow, rather than relying on retroactive discipline.
Publish clear attendance, so people understand the ‘why’ and ‘how’ behind the system. We recommend strategies like:
Then, build the same transparency into the product. ACAS advises that well-communicated absence policies improve trust, so make sure your configuration mirrors that guidance.
Don’t let automation blindly enforce every breach. Route flagged exceptions (missed breaks, near overtime) to line managers with context so they can exercise judgement when service or safety requires it.
Doing this protects fairness (and reduces the risk of disputes compared with zero-tolerance settings).
Time & attendance program succeed less because of ‘which software’ and more because of how you codify rules and keep them honest over time. Treat this as an operating-model upgrade first, and a technology project second.
Write (or refresh) clear attendance and absence policies, and do this before switching systems on:
Set consistent corporate baselines, then allow documented, legitimate local variations (e.g., shift patterns, operational constraints). ACAS guidance encourages reasonable flexibility, so individual circumstances can be considered without undermining fairness.
Run controlled pilots and scale only when KPIs move in the right direction. UK government delivery guidance explicitly recommends testing and comparisons to mitigate risks associated with launches.
Attendance control should be viewed as a long-term management capability. It’s a way of making better, fairer labor decisions rather than a surveillance exercise. When you frame it this way, the technology underpins three strategic outcomes:
So, management should be sure to treat time and attendance controls as part of an operating system for people.
You can download in-depth presentations on Workplace Productivity and 100s of management topics from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.
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