Time And Labor

Term Definition
Time and Labor is the process of tracking, managing and allocating hours worked by employees. Time and Labor are two key drivers in organizations. Efficient allocation and management can positively impact revenues. Inefficiencies can result in project cost overruns, decreased profit margins and dissatisfied customers. Time and labor systems enable organizations to capture time worked in real-time and as such, create daily billing and/or daily project costs.

The structure of the organization and nature of work has changed significantly in the last several decades. Globalization, outsourcing, and real-time collaboration across the planet have enabled companies to reduce costs, leverage a global talent pool and execute challenging deliverables with a dispersed yet incredibly connected workforce. In addition to labor dispersion, companies are challenged to achieve and maintain compliance with regulations such as Sarbanes-Oxley, which directly impact project management and execution. These shifts, in the way we work, have created the need to track "differentiated time", to allocate costs to the right projects, whether they are billable or not, and to justify labor costs of internal and external service units and engineering departments. In today's business environment, companies may face challenges such as not having a tangible measure of value versus effort of internal departments or employees working long hours to meet project milestones. Reporting does not capture the extent these issues and therefore don't help expose a long term solution to resource overload.

Project-based time and labor software is designed to track and report on "differentiated time", helping companies remain competitive and meet the significant challenges of today's business environment. Automating time and labor eliminates manual time tracking, and multiple systems. Data is collected and integrated, which allows organizations to produce reporting that shows the breakdown of effort across the organization and by project. An effective enterprise resource management plan must have an efficient system for tracking, and measuring time and labor.

Area of Application
Project Management
Time and Billing
Workforce Management

Related Terms
Time and Attendance

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