Time tracking
min read

Is Time Tracking Effective?

Is Time Tracking Effective?

Benjamin Franklin once said, “Lost time is never found again.” And he had a point. We can’t ever get our time back, so it’s important to use it wisely. This is true in every aspect of life – but here we’ll look at it in relation to the workplace. One study has alarmingly revealed that, on average, workers are only productive for two hours and 53 minutes during an eight-hour working day. That’s a lot of ‘lost time’! So, how can you implement time management in order to ‘gain time’ and boost productivity? One idea is time tracking. That’ll fix everything, right? Well, the effectiveness of time tracking is actually up for debate…

The benefits of time tracking

Whether you choose to track your time via paper timesheets, spreadsheets, a swipe-card system, a geofencing system or time-tracking software, there are many advantages to doing so. Such as:

Increased productivity

Research has shown that keeping a time-tracking log can increase productivity by 80%. How? By analyzing the data collected through time tracking, businesses can identify tasks that are taking longer than expected and look for ways to streamline them, thus improving productivity.

Better allocation of resources

Time tracking can help businesses to allocate resources more efficiently. By discovering the amount of time being spent on different activities, businesses can better understand where their resources are being used and can make informed decisions about how to allocate them. This can help them to achieve better results and be more competitive in their market.

Accurate billing

Time tracking allows companies to accurately measure the amount of time being spent on different tasks. This can be particularly useful for businesses that bill clients based on the amount of time spent on a project. By tracking the time spent on each task, companies can ensure that they are accurately billing clients and are not losing money due to inefficiencies. Overcharging or undercharging begone. 

More profitability

Time tracking helps to stem money leaks by allowing organizations to see how they are using their time and resources, and adjust anything for future projects to encourage maximum profitability. Time tracking is often a big eye-opener when it comes to seeing exactly how much time is spent on what.

Many types of workers benefit from time tracking

From large companies to one-man-band freelancers, time tracking is useful for all types of people and businesses, including:

  • Companies that bill by the hour, such as digital agencies, law firms and consultants.
  • Businesses with part-time or hourly workers, such as in the manufacturing, service or retail industries.
  • Non-profits and charities, so that they can see where every penny goes.
  • Freelancers, such as writers, designers or video editors.
  • Remote teams, to keep track of everyone’s progress despite not physically working together.

The pitfalls of time tracking

Whilst all of these benefits give time tracking the thumbs-up, there are also some thumbs-down elements to it. Like:

It might be demotivating

Employees may feel like they are constantly being watched and micromanaged, which would impact morale. This may lead to a focus on meeting time targets rather than on the quality of work being produced. If employees feel that they are being monitored too closely due to a lack of trust, they may become anxious and stressed, which can negatively impact their productivity. They may also actively decide to disengage and become less loyal to the company.


There is the risk that time tracking creates an environment where employees feel pressure to inflate the amount of time being recorded for certain tasks – “I definitely spent three hours on that report, rather than two hours on it and one doomscrolling”. This can lead to an inaccurate representation of the time being spent on different things, which can in turn lead to poor decision making within the company.

It may be costly

Time tracking can be time-consuming and costly to implement. Setting up and maintaining a time-management system requires a significant investment of time (employee labor) and resources (software cost, licensing fees, maintenance, admin, etc), which may not be practical for all businesses. This money may be better spent elsewhere to get a better return on investment.

It could be unnecessary

If you’re using time tracking in order to bring about positive change within a company, it may not actually be necessary. The best resource may be simply talking to your employees; asking them what they’re working on, how they’re finding it, what could be done to improve things, where there are problems, who’s not pulling their weight, who is going above and beyond… Then respond with the relevant measures. Seeking input from staff will make them feel valued, and will probably offer much more insight than a bunch of time data.

It devalues value

Huh? Allow us to explain. Just because you’ve spent multiple hours on a project doesn’t mean it’s good. A client would rather pay for value than time, and should care more about quality of work than quantity of time. If you produce results, what difference does it make how long it takes you? The same ethos can be applied for charging per word. Imagine if the ad agency who came up with Nike’s ‘Just Do It’ slogan charged in such a manner – short-changed wouldn’t quite cover it! Time tracking may simply add an extra layer of admin that distracts from the task at hand and adds no value to the process.

So, how effective is time tracking, then? At the end of the (working) day, the effectiveness of time tracking will depend on the specific needs and objectives of the company, plus how willing its employees are to embrace it.

So is it effective?

Yes… well, in most cases. If you find yourself needing to drive efficiencies in your business then tracking your team’s time is super effective. It will allow you to understand how each person is spending their day and ways in which you can support them to be even more productive.

If you’re business bills by the hour and you want to make sure you are capturing every element of someone’s time, so you can make sure you’re billing accurately and fairly, then again, time tracking is super effective.

However, if you’re selling value, then time tracking may not necessarily be the most effective way to show this to your client. They’re paying for the 20 years experience… not the 20 minutes providing the solution to their problem!

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