Clock watching: Exaktime Inc. makes time clocks sturdy enough to withstand duty at construction sites.

AS the owner of a construction company in the 1990s, Stephen Simmonds was understandably distressed when he would go to check on his job sites and found many of the workers weren't there when they were supposed to be.

A half-hour time differential might only mean a few dollars for an individual worker. But multiply that by hundreds of workers at dozens of sites and his San Fernando Valley company was losing tens of thousands of dollars a year.

"My workers would write down on their time sheets that they clocked out at 3 p.m., but when I would show up at 2 or 2:30, they were already gone," Simmonds said. "We were paying them for time not spent on the job."

The obvious solution, or course, was to bring in a time clock. Trouble was, no time clock on the market was portable enough or rugged enough to withstand the rigors of outdoor construction sites.

Sensing a business opportunity that could also help him keep better track of his own workers, Simmonds designed a small, battery-powered time clock in a weather-resistant casing.

Unlike the traditional punch card time clocks in old-line factories, this one would use color-coded durable keys that each worker would swipe " across a sensor to record the time. The clock could then be hooked up to a laptop or handheld computer and the information downloaded for use back at the office.

Simmonds handed off the design to a machine shop and, by 1999, bad several of these time clocks operating at his own work sites, padlocked to fences or trailer doors. Then, calculating that other construction and contracting companies were experiencing the same problems, he put a small ad in a building materials catalog.

"The phones started ringing and they really haven't stopped ringing since," he said.

Within months, Simmonds bad set up a new company called Exaktime Inc. in a Woodland Hills office building, and had hired a software executive to run the operation. Simmonds returned to a full focus on his construction firm, only now he was saving thousands of dollars per month in labor costs.

Meanwhile, Exaktime took off as construction managers trying to get a handle on their labor costs saw the value of an accurate yet rugged time clock. This year, Exaktime clocked in at number 153 on Inc. Magazine's list of the 500 fastest growing companies in the nation, with cumulative revenue growth from 2003 to 2005 at 690 percent.

Niche player?

That growth is continuing: the company is on track to generate $12 million in 2006 after posting revenues of $4.7 million in 2004 and $7.3 million in 2005. But now Exaktime is at a crossroads.

With the construction industry slowing, the company must penetrate new markets in order to keep growing at anything resembling the blistering pace of the last four years. But in so doing, Exaktime must go up against a host of competing time clock technologies, including cheaper Web-based systems, as well as more advanced biometric scanning systems that can track workers based on their fingerprints, irises and other physical characteristics. In addition, some of these systems do far more that simply clock work hours.

"The Exaktime job clock is just that, a time collection piece," said Jason Softer, director of application and integration services for Fort Lauderdale, Fla.-based AlphaStaff Inc., a human resources outsourcing firm. "There is a gap between this and what's known as a complete time and attendance feature set, which includes scheduling, managing paid time off, etc. This could force Exaktime to be a niche player."

For now, though, the Exaktime clock remains one of the most portable and durable products on the market for outdoor construction sites. The clock itself costs about $400, plus $10 for every color-coded key issued. Not only are there green "clock in" and red "clock out" keys, but other color keys can be used to track workers as they begin or finish various tasks at the construction sites. For example, a yellow key might be used for electrical-related work and a blue key for drywall installation.

Large companies with multiple construction sites can easily rack up tens of thousands of dollars in setting up the Exaktime system. But that expense can more than pay for itself in increased productivity and an improved ability to accurately gauge construction costs, according to one longtime user of the Exaktime clock, West Los Angeles-based Scharff Construction Co. Inc.

"We spent $3,000 on the system and we realized all the savings back within just six months," said Kim St. Dennis, office manager with Scharff Construction. "We started getting much more accurate readings on just how much time our workers were spending on site and at specific jobs on the site."

Taking that data back to the office and running computer spreadsheets allowed the construction firm to get more of a handle on its labor unit costs. There was a downside, however, as employees reacted against being tracked so closely.

"They had never worked in an environment with an accurate time clock and were quite suspicious at fast--you know, that we were somehow being like 'Big Brother,'" St. Dennis said. "But they quickly discovered that if they clocked in on the Exaktime clock, they could get paid more quickly than they could before because we could process the checks faster."

Of course, keys get lost and employees sometimes forget to punch in or punch out. And one worker can leave, giving his key to a friend who punches him out later.

To that end, Tony Pappas, president and chief executive, said Exactime is looking at developing a video monitoring system. But this poses its own problems, from "Big Brother" concerns to technical challenges. Yet more tracking of worker movements is exactly where the time attendance industry is heading. Combining time clocks with biometric scanners is already commonplace at work sites requiting high security. To compete with these systems, Exaktime will have to continually offer more software features with its clock systems, something that Pappas said the company is already working on.

But human resources outsourcing consultant Softer said he believes there will always be some worksites that are out of reach of electrical connections, satellite links or Internet hookups. "In these environments, nothing works better than a durable, battery-powered time clock. And the Exaktime clock fits that niche beautifully," he said.

Exaktime Inc.

Founded: 2000

Core Business: Providing battery-powered time clocks to construction sites

Employees in 2005:23

Employees in 2006:29

Goal: To penetrate other markets besides the construction industry

Driving Force: The need of construction companies and other industry managers to accurately track the time workers are spending on the job