Punch clocks: Tracking staff's working hours can plug the productivity gap

A European court ruling that requires companies to track employees' exact hours could yield useful productivity data.

All companies in the European Union will have to track their employees’ working hours: That was the ruling delivered by the EU’s top court Tuesday. At first sight, this appears to be a pointlessly cumbersome measure. But given the technology available today, it may actually be a good idea.

The European Court of Justice ruling is the result of a legal action by Spanish labor unions against the local subsidiary of Deutsche Bank. The lender said it was tracking only overtime, as required by Spanish Supreme Court rulings interpreting the local worker rights legislation. But the ECJ ruled in favor of the unions, supported in this case by Spain’s socialist government, saying the EU’s working-time directive required employers to keep exact track of workers’ hours, not just to calculate overtime but also to make sure they get the obligatory rest periods — at least 11 uninterrupted hours a day and at least 24 uninterrupted hours per week, as well as rest breaks after every six hours of work. The court told EU member states to require that all employers set up “objective, reliable and accessible” time-tracking systems.

This may seem superfluous and dated — another case of EU regulatory overreach. As the Confederation of German Employers’ Associations said in a statement, “We employers are against the universal reintroduction of the punch clock in the 21st century. One cannot react to the challenges of Work 4.0 with Time Tracking 1.0.”

The punch clock, however, has evolved, and businesses don’t have to sacrifice contemporary flexibility for exact timekeeping. Modern time- and attendance-tracking software, often offered as a cloud-based service, works on mobile phones. Clocking in requires a tap on the screen, so even when you check work-related emails or take a call from your boss at home, tracking the time isn’t a major inconvenience. Some systems will automatically check in employees at customary work sites using GPS. Many of the packages are priced so even a small business can afford them. Most provide handy analytical tools.

These software packages can work well for blue-collar jobs, in which overtime and breaks are often the subject of disputes. (Pro-employer overtime laws can even lead to mass protests, as they did in Hungary late last year, when the parliament doubled the amount of overtime with deferred payment that employers can demand from workers.) But they’re equally useful for white-collar occupations, even those where there’s no need to bill clients by the hour.

Granted, for some high-octane occupations, senior management jobs, and exciting creative and scientific pursuits time-tracking is an extra chore. People in these jobs expect to keep long, irregular hours, and many of them like it that way. I’d argue, though, that even for such workers, who don’t often require unions’ help in improving their working conditions, punching the clock (OK, the smartphone) can be a useful habit because of the data it provides.

It’s helpful to know how much we work and how we spend that time. People who work too much run serious health risks, including a predisposition to risky alcohol use and heart disease, that can make them less productive. One of the reasons the French are more productive than the European or Group of 7 average may be that they work fewer hours than average; a negative relationship between long hours and productivity has been established. If we knew how much time we spend working, including those minutes and hours we lose to 24-hour connectivity, we might want to make a conscious effort to pace ourselves — similar to how we do more physical exercise more often thanks to the fitness trackers built into our devices.

For managers, too, it might be interesting to combine data on the quantity and task breakdown of hours worked by their employees with productivity information. It may turn out, for example, that a business would be better off with more workers keeping shorter hours than with an overworked team that’s less effective due to fatigue and stress.

Governments, too, would benefit greatly from the precise and systematic collection of data on hours worked. Policies are often based on notions of relative productivity: In the U.K., for example, bridging a “productivity gap” with other industrialized nations is very much part of the national agenda — but does the gap even exist if working-time calculations are only approximate?

For all this information to be collected, analyzed and put to use, it’s helpful that the EU is about to make “punch clocks” obligatory. The developers of time-tracking software tell clients that they must make its use mandatory to get people into the habit, and that the data must be checked regularly to weed out abuses and negligence.

EU member states should take the court’s ruling as seriously as possible. If diligently applied, it could do their workers and their economies a lot of good.