How to Track Labor Costs Per Job Automatically

Why Automatic Matters

Manual labor tracking—paper timesheets, end-of-week data entry—fails for predictable reasons:

• Memory decay: People can't accurately remember what they worked on yesterday, let alone last week
• Rounding: "About 4 hours" becomes the default for everything
• Missing entries: Busy days get forgotten entirely
• Admin burden: Someone has to enter all that data somewhere

Automatic tracking means capturing time when it happens, where it happens. Workers clock in and out of jobs on the floor. The data goes directly into your job costing system. No transcription, no memory, no delay.

"We went from 60% labor tracking accuracy with timesheets to 95%+ with digital time tracking. The difference in our job cost data was dramatic."

Labor Tracking Methods Compared

Paper Timesheets

Workers write down what they worked on and for how long.

• Accuracy: 50-70%
• Friction: Low for workers, high for admin (data entry)
• Cost: Free, but hidden admin costs

Verdict: Works for very small operations. Breaks down quickly as volume increases.

Spreadsheet Entry

Workers or supervisors enter time into a spreadsheet daily or weekly.

• Accuracy: 60-80%
• Friction: Moderate (requires computer access)
• Cost: Free, but significant time investment

Verdict: Better than paper, but still relies on memory and manual entry.

Barcode/QR Scanning

Workers scan a code on the work order to clock in/out.

• Accuracy: 90-98%
• Friction: Very low (scan takes 2 seconds)
• Cost: $100-300 per scanner + software subscription

Verdict: Excellent balance of accuracy and simplicity. Most popular method for shop floor tracking.

Tablet/Kiosk Interface

Workers tap on a touchscreen to clock into jobs.

• Accuracy: 90-98%
• Friction: Low (tap to select job)
• Cost: $200-500 per tablet + software subscription

Verdict: Good for areas without printed work orders. More flexible than scanning.

Mobile App

Workers use their phones to clock time.

• Accuracy: 85-95%
• Friction: Low-moderate (depends on workers having phones)
• Cost: Software subscription only

Verdict: Good option when workers move around. Phone distraction can be a concern.

Implementation Guide

Step 1: Choose Your Method

Consider your shop layout:

• Fixed workstations: Tablets or kiosks at each station work well
• Mobile workers: Phone apps or portable scanners
• Printed work orders: Barcode scanning is natural

Many shops combine methods—tablets at machines, phone app for material handlers.

Step 2: Define What to Track

At minimum, capture:

• Job number
• Operation (if multi-operation routing)
• Worker
• Start and end time

Optional but valuable:

• Setup vs. run vs. inspection time
• Machine or work center
• Quantity completed
• Notes (issues encountered)

Step 3: Set Labor Rates

Time × Rate = Cost. Define rates that reflect true labor cost:

• Base wage: What you pay the worker hourly
• Benefits load: Add 20-30% for benefits, taxes, insurance
• Total loaded rate: Use this for job costing

A $20/hour worker typically costs $26-30/hour fully loaded.

Step 4: Train Workers

Keep training simple:

• Show the device (scanner, tablet, phone)
• Demonstrate clock in / clock out
• Practice on a real job
• Explain why it matters (better quoting, fair workload allocation)

Most workers are comfortable within an hour. The key is making the process feel easy, not punitive.

Step 5: Monitor and Adjust

First week: Expect 70-80% compliance. Gently remind workers who forget.

First month: Target 90%+ compliance. Identify friction points and fix them.

Ongoing: Review for anomalies. Jobs with no time logged. Workers with unusual patterns. Use these to improve data quality.

Common Mistakes to Avoid

Making It Too Complicated

If workers have to enter 10 fields to clock time, they won't do it. Minimum viable data capture beats comprehensive data that doesn't get entered.

Not Tracking Setup Separately

Setup time is where small jobs get killed. If setup and run are lumped together, you can't see this. Separate them.

Ignoring Rework and Indirect Time

If workers only log "productive" time, your job costs will look better than reality. Track rework, waiting, and indirect activities—even if it's uncomfortable.

Punishing Honest Reporting

If a job goes over and the worker gets blamed, they'll stop reporting accurately. Use data for improvement, not punishment. The goal is visibility, not surveillance.

Not Closing the Loop

Tracking data is useless if it doesn't change behavior. Share job cost results. Celebrate wins. Use insights to improve quotes and processes. Workers who see their data used are more likely to contribute good data.