How to Eliminate Time Theft

Alexandra Franco

13 June 2017    |   

Time theft is an unfortunate reality for many business owners. It can have huge impacts on labour costs as well as staff productivity and morale. Without the correct tools and systems, time theft can be difficult to catch, and even harder to stamp out. What is time theft? Time theft occurs when an employee bills for time they have not worked, or accepts remuneration for time that has not been attributed to work. The most common causes of time theft include: Staff running late to work, and fudging start times. Staff staying late after work to accrue unauthorised overtime or allowances. Staff taking extended breaks.   Where a team member clocks out for another team member. Staff not submitting correct hours for leave requests or sick pay. How much is time theft costing your business? Labour is often regarded as one of the biggest expenses in running a business, alongside cost of goods and utilities. For industries that rely heavily on high staffing numbers, such as hospitality, it is particularly important that managers are not only rostering staff to meet labour budgets and KPIs, but also take control to enforce the roster. Unfortunately, when time theft is left unchecked it can cause unexpected additional costs, including reduced staff productivity, profitability, and can negatively impact staff who do the right thing. Even time theft that isn’t malicious can add up. For example, according to a study conducted by Tanda, the average Australian business has approximately five minutes misappropriated every shift, just from staff clocking in or out late.*  While five minutes may sound negligible, it can quickly add up over a month and even a year. For example: A team of 30 employees working five days a week could rack up an additional 50 hours/ month in misappropriated time. This could end up costing the business approximately $914/ month, and over $10,972/ year (based on minimum wage 2017). How to eliminate time theft? While most employers would like to believe that their staff are honest and trustworthy when filling out their timesheets, there are unfortunately a few who ruin it for everyone. Systems such as paper timesheets, excel spreadsheets, or outdated Bundy clocks, are highly susceptible to allowing time theft in a business. They fail to accurately track staff attendance due to their lack of verification and functionality. This is because there is no way to confirm that staff finished and started when they say they did, or that they were in fact the ones who signed off their timesheet in the first place. Using a cloud based time and attendance system is the only way to ensure accurate staff attendance records, verify that the correct staff member finished at the correct time, and ensure staff are not overpaid for work that wasn’t completed. The importance of a good time and attendance system is recognised by the Fair Work Ombudsman, who regularly includes ‘implementing an electronic time and attendance system’, as part of their underpayment resolution processes. So what should you look for when implementing a Time and Attendance system to combat time theft in your business? 5 Must-have Time and Attendance System features to Eliminate Time Theft 1. Time Clock with Photo Verification A  time and attendance system must have a time clock device, and use both photo verification and a PIN code to confirm that the correct staff member has clocked in. This provides an indisputable solution to prevent staff getting their friends to clock in for them, or clocking in late. Fingerprint scanners will not stop time theft, and have many issues that will prevent it from working effectively. 2. Smart Rounding Now you might be thinking, surely staff could still tinker with a time clock system, if they clock in early claiming to have worked? Enter the beauty of smart rounding. Smart rounding prevents staff from taking advantage of clocking in early or late when they haven’t been working. It is customisable and can round to the minute for staff clock ins and outs. This stops “accidental” time theft from staff clocking in before their shift starts, and clocking out after they have stopped working. 3. Complex Award Interpretation As time and attendance is closely linked to payroll, it’s extremely important that your system is able to comprehend any number of complex pay scenarios. For example, staff that stay back late, skip their break, or work over night may incur overtime or penalty rates. Thus, an Award Interpretation system must be able to transparently identify different types of overtime, penalty rates, and allowances if it is to prevent time theft. 4. Predict Correct Staff Ratios A great time and attendance system should be able to not only record when staff start and finish work, but how many staff you need for the shift. Paying staff for the hours they actually work is the first step in optimising your labour costs. The second step works to improve your labour efficiencies by predicting the optimum number of staff required for the shift, ensuring that you’re not over or understaffed. This type of predictive analytics software is the latest method for businesses to ensure their labour costs are under control. 5. Fast & Simple Timesheets Using an electronic time and attendance system is pointless unless you are able to immediately generate timesheets from it. It is also vital that the system is cloud based, allowing you to easily approve timesheets from anywhere. These timesheets should be easy to use and quick to approve by utilising technology such as autosave, fast editing, and cognitive payroll. This will allow you to complete your payroll in minutes, not hours or days. Time theft, if not managed accordingly, has the potential cost business owners thousands of dollars every year. It is therefore important that business owners implement simple, yet effective measures, such as electronic time-keeping devices, and integrated time and attendance systems to combat time theft. Improving staff attendance tracking results in greater productivity and profitability, and can provide valuable insights into how your team works. *Based on statistical analysis of Tanda users time & attendance data.

Time theft is an unfortunate reality for many business owners. It can have huge impacts on labour costs as well as staff productivity and morale. Without the correct tools and systems, time theft can be difficult to catch, and even harder to stamp out.

What is time theft?

Time theft occurs when an employee bills for time they have not worked, or accepts remuneration for time that has not been attributed to work.

The most common causes of time theft include:

  • Staff running late to work, and fudging start times.
  • Staff staying late after work to accrue unauthorised overtime or allowances.
  • Staff taking extended breaks.  
  • Where a team member clocks out for another team member.
  • Staff not submitting correct hours for leave requests or sick pay.

How much is time theft costing your business?

Labour is often regarded as one of the biggest expenses in running a business, alongside cost of goods and utilities. For industries that rely heavily on high staffing numbers, such as hospitality, it is particularly important that managers are not only rostering staff to meet labour budgets and KPIs, but also take control to enforce the roster.

Unfortunately, when time theft is left unchecked it can cause unexpected additional costs, including reduced staff productivity, profitability, and can negatively impact staff who do the right thing.

Even time theft that isn’t malicious can add up. For example, according to a study conducted by Tanda, the average Australian business has approximately five minutes misappropriated every shift, just from staff clocking in or out late.*  While five minutes may sound negligible, it can quickly add up over a month and even a year.

For example:

A team of 30 employees working five days a week could rack up an additional 50 hours/ month in misappropriated time. This could end up costing the business approximately $914/ month, and over $10,972/ year (based on minimum wage 2017).

How to eliminate time theft?

While most employers would like to believe that their staff are honest and trustworthy when filling out their timesheets, there are unfortunately a few who ruin it for everyone. Systems such as paper timesheets, excel spreadsheets, or outdated Bundy clocks, are highly susceptible to allowing time theft in a business. They fail to accurately track staff attendance due to their lack of verification and functionality. This is because there is no way to confirm that staff finished and started when they say they did, or that they were in fact the ones who signed off their timesheet in the first place.

Using a cloud based time and attendance system is the only way to ensure accurate staff attendance records, verify that the correct staff member finished at the correct time, and ensure staff are not overpaid for work that wasn’t completed.

The importance of a good time and attendance system is recognised by the Fair Work Ombudsman, who regularly includes ‘implementing an electronic time and attendance system’, as part of their underpayment resolution processes.

So what should you look for when implementing a Time and Attendance system to combat time theft in your business?

5 Must-have Time and Attendance System features to Eliminate Time Theft

1. Time Clock with Photo Verification
A  time and attendance system must have a time clock device, and use both photo verification and a PIN code to confirm that the correct staff member has clocked in. This provides an indisputable solution to prevent staff getting their friends to clock in for them, or clocking in late. Fingerprint scanners will not stop time theft, and have many issues that will prevent it from working effectively.

2. Smart Rounding
Now you might be thinking, surely staff could still tinker with a time clock system, if they clock in early claiming to have worked? Enter the beauty of smart rounding. Smart rounding prevents staff from taking advantage of clocking in early or late when they haven’t been working. It is customisable and can round to the minute for staff clock ins and outs. This stops “accidental” time theft from staff clocking in before their shift starts, and clocking out after they have stopped working.

3. Complex Award Interpretation
As time and attendance is closely linked to payroll, it’s extremely important that your system is able to comprehend any number of complex pay scenarios. For example, staff that stay back late, skip their break, or work over night may incur overtime or penalty rates. Thus, an Award Interpretation system must be able to transparently identify different types of overtime, penalty rates, and allowances if it is to prevent time theft.

4. Predict Correct Staff Ratios
A great time and attendance system should be able to not only record when staff start and finish work, but how many staff you need for the shift. Paying staff for the hours they actually work is the first step in optimising your labour costs. The second step works to improve your labour efficiencies by predicting the optimum number of staff required for the shift, ensuring that you’re not over or understaffed. This type of predictive analytics software is the latest method for businesses to ensure their labour costs are under control.

5. Fast & Simple Timesheets
Using an electronic time and attendance system is pointless unless you are able to immediately generate timesheets from it. It is also vital that the system is cloud based, allowing you to easily approve timesheets from anywhere. These timesheets should be easy to use and quick to approve by utilising technology such as autosave, fast editing, and cognitive payroll. This will allow you to complete your payroll in minutes, not hours or days.

Time theft, if not managed accordingly, has the potential cost business owners thousands of dollars every year. It is therefore important that business owners implement simple, yet effective measures, such as electronic time-keeping devices, and integrated time and attendance systems to combat time theft. Improving staff attendance tracking results in greater productivity and profitability, and can provide valuable insights into how your team works.

*Based on statistical analysis of Tanda users time & attendance data.

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When you have all  these different food options and you have to decide what you’re going to have in a short time.  And you panic because everything looks delicious and freeze up, then can’t make a decision. (Laughs) M: (Laughs) I love it. I’ll have to borrow that one next time I’m out to lunch. So, what got  you interested in the hackathon?   I know Tanda from previous experiences. I went on the Starter Catalyst trip with Alex  Ghiculescu, one of the directors of Tanda, so thats where I met them. Previous to that, when I  was studying at QUT I had met some of the other Tanda guys as well without realising they had all ended up at Tanda. We did another startup weekend a few weeks back, and were all quite keen on hackathons and anything tech we can get our hands onto. It was also that they actually organised it that gave us a chance to just rock up and enjoy the experience. M: Were you surprised when you noticed you were one of only three women  participating in the hackathon?    Not really. I think I did pick up on it. I did look around the room to see if there were many other girls. But its not really surprising. I’m just used to being surrounded by guys basically. (Laughs) M: Do you get that a lot in the office as well? Well our office is pretty good. We’re quite diverse and multicultural. There are a few more guys than girls, but its just because were quite a small office. I’m one of the developers so the other woman is business operations. It’s well balanced. M: Were you surprised by any of the facts that came out from the hackathon? One was  women arrive to work earlier but men will often stay back later. Not particularly, if you look at it you could assume women tend to go home because generally  they are the primary caregivers. Whereas, generally men can stay back because they have  the opportunity to. I fall more into the male category, I rock up sometimes a little bit later  (laughs) but I usually stay back because I don’t have anything else to do. M: What are your opinions on women often being primary caregivers, while working  and still having to go home and take care of other duties?     I think it is changing, and becoming more balanced. It’s just a generational thing and  culturally, at one point the logical conclusion was to have one parent in the home. And  because of the physiological requirements it happened to be the women caring for children.  But now that we don’t have to go along that path anymore its changing. My boyfriend wants to  be the stay at home dad, he wants to be the primary caregiver and I’m happy to go along with  that and i’ll be the person who brings home the bacon. I think its just a cultural shift. M: And what was it like going overseas on the trip and seeing Facebook , Google and all the others?    It was amazing. My favourite point was walking into the Facebook campus and its just wow.  You feel like you’re in disneyland for a techie.  The whole culture over there is completely  different. You dont have to explain what a software developer is. Actually, over there you get  the name engineer. Theres a completely different approach to it.  It was really interesting to  see how they approach the whole tech industry over there compared to here in Brisbane. if I  tell someone I’m a software developer or that I code they might not even have any idea what  that is, and I’ll have to explain what that entails. M: What was it like trying to do the hackathon in 2 hours, with the mad dash to get  something up and running?    It was actually quite funny, because I really like the high pressure environment of hackathons.  When you’re coding for a long time you get in that groove, and the longer you stay in that  groove the longer you can stand long runs of coding. 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He’s very business oriented and charismatic. He  can really get you excited for whatever it is he’s talking about. M: Maybe not specifically at the hackathon, but have you ever had any reactions when  you say I’m a female coder?     I’ve actually been reading a lot of blog posts lately where people say that they say they’re a female coder and people laugh or don’t take them seriously but luckily I haven’t had that yet. I’ve never had a surprise look or a “Really?” reaction. It’s always been “Oh, thats cool”,  and its really positive and encouraging. M: It’s good to see there are positives coming through now, and the reactions aren’t so  ridiculous.   I’m sure I will encounter it at some stage in my career. But I’ve been really lucky to surround myself with people who are positive and encouraging. M: What future plans do you have for yourself or the business? Well, I’m currently at Cohort Solutions and I really see that succeeding so I’d like to stay there  for a while. 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Australian Businesses Suffer from Absenteeism

Definition: Absenteeism is the practice of regularly staying away from work without good reason. Everyone is guilty of absenteeism at least some point in their lives. But how do you know when absenteeism is becoming a real problem within your business? How much it is actually costing your business invaluable work time, productivity and money? A survey conducted in November 2014 by Direct Health Solutions, a firm that specialises in reducing workplace absenteeism, found that sick days are costing Australian businesses a record $33 billion in payroll costs and lost productivity. Sick days are not only costing Australian businesses money, they are also being incorrectly recorded. “Absenteeism levels are understated and incorrectly recorded in over 50% of organizations.” “To ensure employers understand the impact and cost of absenteeism to their business, companies need accurate recording and measurement systems in place” said Managing Director of Direct Health Solutions, Paul Dundon. Tanda, an award-winning time and attendance software, is a cloud-based system that helps small and large businesses manage their staff costs. Through the use of our automated time and attendance tracking software, in just a matter of minutes Tanda can calculate the total number of employees who take sick days along with the total cost of lost revenue and productivity due to absenteeism. Tanda offers a complete payroll administration system that allows businesses to manage and monitor time and attendance from any device at any time. The processing of an entire payroll that used to take hours to complete can be processed in a matter of minutes.   You can trial Tanda yourself for FREE to see just how easy it really is to use. We guarantee you’ll never look back.

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Punctuality? Challenge accepted!

Tanda is taking punctuality to a whole new level with our Employee Attendance Reports and challenged employees this month to up their game. This was all in celebration of the anniversary of the Time Clock where we had a Bundaberg Rum giveaway prize to the lucky winner. Congratulations to Liz from Clement Coffee in Victoria, Melbourne for being a highly punctual employee! Clement Coffee’s obviously doing something right to create a great workplace atmosphere where employees don’t want to be late for work! Did we just gamify employee attendance? From a business point of view, every manager would love to see their employees get actively involved in turning up to work on time. Now with great accuracy using data from Tanda’s time clocks, businesses can track the exact times an employee clocks in and out, but also generate a report to see staff punctuality stats. Knowing this kind of information adds all kinds of value, especially to those dreaded performance reviews. Businesses with multiple departments/locations can even compete and compare scores at monthly meetings. Existing Tanda users can access the Attendance Reports already. Not using Tanda yet? Sign up for an account today.

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About the author

Alexandra Franco

Alex was a former Business Manager for Tanda.

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Kelsey Stay is a Web Developer and Graphic Designer working at start­up company Cohort Solutions. Cohort Solutions helps international students get their affairs in order while remaining safe upon arrival to Australia. In 2014, she was selected to participate in the Startup Catalyst Tour, that sends 20 young tech entrepreneurs to the headquarters of Facebook, […]

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