The importance of time management at work

Why can a team be constantly busy—and still not get anything done?

One of the key factors is invisible time losses that are difficult to notice without systematic accounting. These can be unnecessary switching between tasks, unplanned meetings, or unevenly distributed workloads.

For example, a study by Harvard Business Review showed that employees switch between applications and websites an average of 1,200 times a day. Each switch takes about two seconds, which adds up to hours of unproductive time. Such “invisible costs” underscore the importance of structured work: clear time management, minimization of distractions, and thoughtful planning allow you to not work longer, but achieve more in less time.

Peter Drucker aptly notes: “Time is the scarcest resource and unless it is managed nothing else can be managed.

This is especially important in small businesses, where every hour of the team's time directly affects costs, deadlines, and profitability.

Why businesses need to track working hours

In small teams, many processes happen intuitively. Everyone takes on “something of their own”, tasks change as they go, and reporting often boils down to “everyone is working”. But without understanding how much time is actually spent on work, it is difficult for a manager to assess efficiency, plan workloads, and avoid additional costs.

This is why systematic time tracking is necessary:

• to see exactly where working time is spent—by task, client, and area;
• to identify overload or downtime—and adjust task distribution accordingly;
• analyze profitability—how much time and resources a particular client or project requires;
• prepare for growth—have clear data for scaling processes, teams, and budgets.

This is confirmed by Forbes productivity statistics—among employees who use time tracking software, productivity increased by 47%.

For example, MPW spent several years tracking time in 17 different Excel files and manually transferring data to the financial system—this took up to 10 administrators and cost dozens of hours each month. After implementing a time tracking system, the team saved 79 hours per billing period—the equivalent of one full-time employee.

How time tracking helps make decisions

Time management is not about micromanagement, but about quality analytics. When a company systematically records how much time is spent on tasks, clients, or areas, it obtains objective data that can be used to make informed management decisions:

1. Who is overloaded and with what. Reports show who consistently works overtime or performs an excessive number of small tasks.
2. Which processes take time without return. For example, if contract approval takes twice as long as expected, you can change the plan, delegate stages, or automate some actions.
3. How much does each project really cost? For businesses, this is a way to accurately calculate costs, profitability, and determine which services are worth developing.
4. Where is focus lost? Time tracking reveals “losses” due to unnecessary meetings, constant switching between tasks, or non-priority requests.

As Stephen Covey rightly said, “Most of us spend too much time on what is urgent and not enough time on what is important”.

Time tracking allows you to clearly see this line and make decisions based on facts rather than intuition.

The role of time tracking in estimating the cost of services

How can you tell which services are really profitable? Without accurate time tracking, it's easy to underestimate labor costs and work at a loss.

In small businesses, team hours are a key resource. But most companies don't factor these costs into their cost structure. As a result, projects only look profitable on paper.

According to Hubstaff statistics, companies lose more than $50,000 per employee simply because they don't track the time spent responding to customer emails.

Time tracking shows the real numbers.

For example, marketing agency Candybox Marketing implemented time tracking to record the team's actual project costs. This allowed them to abandon unprofitable projects and win a tender at twice the rate—all thanks to transparent reports. As the CEO emphasizes, thanks to tracking, the business is growing by 20–40% every year.

Workload control and transparent remuneration

Being busy does not equal being efficient. In fact, in many teams, employees are constantly busy, but this does not produce results. When there is no clear time tracking, tasks are assigned randomly, pay is opaque, and motivation drops.

Tim Ferriss aptly notes: “Focus on being productive instead of busy”.

How time tracking changes this process:

1. Fair pay. If the team works hourly or with performance bonuses, reports eliminate subjectivity.
2. Increased trust. People see what they are getting paid for and how much, which creates a sense of fairness and reduces tension within the team.

Workload balance. When you can see how many hours each employee spends on a task, managers can quickly balance the workload before burnout or downtime occurs.

A telling example is the Ukrainian gift brand ORNER. A team of about 40 people implemented time tracking to control various processes. According to ORNER's art director, Olena Sidenko, the team can now see how much time each stage of the work actually takes. This has made it possible to plan deadlines more accurately, avoid overload, and make decisions about the advisability of spending more time on specific tasks. Transparent reports have become the basis for analysis, rather than intuitive judgments.

How to implement time tracking in your company

The idea of time tracking often causes prejudice. Many associate it with micromanagement or mistrust. But if you explain the goals correctly, the team will start to support the initiative.

Start by answering the question, “Why?”

Statements such as “we want to understand where we are losing resources” or “we are overloaded and need to distribute tasks fairly” are much more effective than “we will track your productivity”.

Give examples: how much time is spent on document approval or endless meetings? And how does this affect deadlines or profits?

According to Deloitte, a team can lose up to 12 weeks a year on ineffective meetings and duplication of tasks alone. This is not an exception—it is a systemic loss of time that can be measured and corrected.

If the team is afraid or doesn't understand the process at first, that's normal. To prevent this, we recommend reading “How to Overcome Team Resistance During Organizational Change”.

Select a department or team for tracking

Ideally, choose a team with a project-based workflow: marketing, design, sales. The effect will be immediately visible: whether the project is profitable and whether resources are being spent logically.

After 2–4 weeks, conclude and show what decisions were made based on the tracking. This creates an atmosphere of trust.

Don't require “minute-by-minute” accounting

People shouldn't have to record every action—the logic is important: “2 hours—negotiations with a client”, “30 minutes—responding to emails”. Excessive detail leads to burnout.

Explain that tracking is not for punishment, but to avoid working in the evenings when tasks could be redistributed.

Develop internal rules

How often should time be recorded (at the end of the day or immediately after the task)? How should absences or training time be marked? Who analyzes the reports and when?

Analyze the data and share the results

Show that tracking has helped you identify unprofitable tasks, delays, or overloads. Explain what changes you have made and how they have affected deadlines, profits, or the atmosphere in the team.

According to Timewatch statistics, 90% of respondents agree that effective time management increases productivity.

Conclusions

Time tracking is not about control, but about respect for your most valuable resource. When a company begins to understand where its team's time is going, it gains the key to growth, employee retention, and healthy productivity.

It's not a tool for pressure, but a way to identify overload, optimize processes, and allow professionals to focus on work that matters.

As Steve Jobs said, “My favorite things in life don’t cost any money. It’s really clear that the most precious resource we all have is time”.

Knowing how time is spent is the first step to spending it wisely.

FAQ

Why does a small business need time tracking? 

To see how the team's time is spent, optimize processes, and make decisions based on numbers. In a small team, everyone often performs several roles at once, and without clear accounting, it's easy to lose sight of where working hours are actually going.

Does time tracking help calculate the cost of services?

Yes, and this is one of the key benefits. If you work with clients on a fixed rate or hourly basis, it's important to understand how much time your team actually spends on each project. A time tracker allows you to:

• record the duration of each task;
• compare the time spent with the income for the project;
• evaluate the profitability of services;
• identify unprofitable or unproductive areas in a timely manner.

This is especially relevant for studios, agencies, consulting, and service businesses, where time = money.

Which time tracking tool should you choose?

It all depends on the specifics of your team's work. There are simple solutions for freelancers and more complex platforms with advanced analytics for agencies and service businesses, such as Tracy, Toggl Track, Yaware.TimeTracker, and others.

How does a time tracker affect team productivity?

It provides a transparent picture of workload, allows you to avoid overloads, and pays fairly for work.