Running a company or a startup, you may want to keep an eye on every detail of it. If you hire software developers, designers, and project managers, tracking working hours is probably what you do on a daily basis. It may not be your favorite duty at work, it may be daunting and frustrating, but in most professional services it became a must.

Time tracking allows to manage employee’s productivity, monitor time spent on a given tasks, and at the end it helps to better optimize future allocation of workforce in the company.

What is even more important, it helps to show the clients what they are actually paying for.

“Time tracking is a necessity for professionals who bill by the hour” — Fast Company

Well, at least that’s the main reason to do so.

Why time tracking makes sense

Studies shown that companies who don’t make use of time management, lose over $18,000 on average every year.

If implemented correctly, time tracking may help your company to be more efficient and transparent with both teams and clients, according to Small Business Trends:

“Proper time and project tracking software can help companies understand and account for the contributions of their employees, despite the more challenging metrics by which those contributions must now be measured.”

Ideally, time tracking can reduce guesswork when assigning workforce or estimating future projects, helping company to better plan the budget.

The reality is, however, much different, as McKinsey & Company report states:

“On average, large IT projects run 45 percent over budget and 7 percent over time, while delivering 56 percent less value than predicted. Software projects run the highest risk of cost and schedule overruns.”

So you may be thinking now:

Why, if it’s so necessary to track working hours, you’re saying it may not be good for me?

I’ll explain it right away.

When time tracking doesn’t make sense

Many companies implement time tracking for the sake of doing so.

In his ‘Project manager’s guide to time tracking’, Michał Bielak pays attention to a very important case:

“…time tracking, when not implemented correctly, can leave your employees overwhelmed and actually not even slightly more productive.”

This is an actual issue in developers’ community, well expressed by Mr. Anne Dev in ‘I’m A Bad Developer, That’s The Only Reasonable Explanation’. He describes how intimidated, afraid, and even ashamed he was by time management solutions he faced:

“I felt like shit and I felt angry. I felt like a burden to my team. And I felt like comparing four hour lunches with a client to four hours of coding was bullshit. But were they right about my under-performance? Or was I in denial about my self-worth and productivity?”

You can see the scale of this problem in the responses and comments he got on Medium and from Hacker News community. Fellow developers feel for him, because they have also felt misjudged about their work and people who don’t understand that software development is tricky and can’t always be measured by strict hours or compared to other projects.

Perils of time tracking

So how to make the most out of time tracking, not pissing off your employees at the same time?

The best way is to avoid these five, common mistakes:

1. Wasting time on time tracking

For many employees tracking time is a disruption.They have to dedicate extra time just to fill in timesheets.

There are many software tools for project managers like Harvest or Basecamp, but they require the users to remember to fill in the specific forms in order to track their working hours. Such reports may be inaccurate, which I will elaborate on in a second, but they are also time consuming for the employees.

There are, however, real-time tracking tools like Toggl, which don’t require to fill any timesheets at all. Instead, the employees start and stop the tracker whenever they need to. This lets them actually do the work and spares some frustration.

2. Not tracking everything

We’re not perfect — let’s admit it. We do make mistakes, lie or forget. So how can time tracking based on retroactively filling in spreadsheets be accurate?

Another research shows how many things we do not count when tracking our time at work, simply because they are unbillable: these are mainly emails, meetings or communication in a team. Not counting emails, for example, leads to serious money losses.

According to Harvard Business Review, U.S. economy is losing 50 million hours, or $7.4 billion a day, in productivity. It happens just because people forget to track the time spent on reading and answering emails as a work time.

3. Not motivating the team to track their time

Tracking time is not something we like to do. For many of us it’s unnatural, or even doesn’t make sense.

It is a manager’s duty to educate employees about the significance of time tracking, and to show them how to do it properly.

As Michał Bielak said in his PM’s guide:

“[you can’t] just gather your team members in a room one day and say, “From now on, we’ll be using this IT time tracking software to see how your work’s going. Click here, now click there, perfect, thanks, the meeting’s over”.

Lack of context may lead to situations like the one described by Mr. Anne Dev, mentioned earlier in this article: people may start to feel bad about the time they put in the timesheets, they will become frustrated and angry about the whole process.

4. Tracking time after finishing the task

I’ve talked about it a little bit before — employees tend to fill in the timesheets after finishing the task, which leads to guesswork and assumptions.

Reports based on imprecise time tracking are misleading, causing company both managerial and financial troubles.

What’s even worst, 9.1% of workers fill in their timesheets once a week, and 3.6% do it once a month, causing even more inaccuracy in the data they put into. Remind your workers to fill in the timesheets on a regular basis or switch to real-time tracking tools.

5. Creating misleading reports

How can you allocate your resources, if the data you get from timesheets is inaccurate?

Not knowing exactly how much time your employees dedicate to certain tasks, you may under or overestimate future projects, which can even affect your company’s budget.

Proper project forecasting is crucial in project management, so you don’t want to make those decisions based on the wrong data.

Consider resource management

While time tracking lets you keep an eye on how many hours your employees spent on the tasks, resource management helps to allocate your resources effectively, based on work capacity and available team members.

This way you’ll make sure that you won’t overwhelm employees with too much work, avoiding downtimes at the same time in other teams.

Based on this simple idea, we’ve created teamdeck — simple resource scheduling tool. Having a solid background in software development, we understand how important it is to properly allocate workforce in recent and upcoming projects, to assure company’s flow, as well as employees’ and client’s satisfaction.

The reason to implement resource scheduling tool is to start focusing on the whole process, getting a high level overview of your team. Using such a tool you are able to control all employees at once, monitoring the projects they are assigned to, holidays and days off.

Task-driven time tracking can lead to ignoring big picture, whereas resource management helps you to better allocate the workforce not only because of the time they spend on a given task, but because of their availability and work capacity.

Find out what works for your company

As I’m not trying to convince you to choose either time tracking or resource scheduling (using both makes perfect sense), I hope that you are more aware of the perils of time tracking, especially if it’s not implemented properly in the organization.

If you want to make the most of time tracking in your company, remember to follow these few steps:

Do you have any thoughts after reading all of this? Please leave a comment below!

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