How to Eliminate Time Theft
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.
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 Systems such as paper timesheets, excel spreadsheets, or outdated Bundy clocks, are highly susceptible to allowing time theft in a business.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.
Awards & Rostering Industry Insights |
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.
Awards & Rostering |
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.
Industry Insights |
Is your workforce prepared for Artificial Intelligence?
Ikea recently announced its intention to explore Artificial Intelligence (AI) through a customer survey ‘Do you speak human?’. It’s a novel idea for a company that makes a living selling flat pack furniture, however, they are right on the money. AI has grown dramatically over the last few years, and it’s expected that the market will be worth $5.05 billion by 2020. Stunts like Ikea’s provide an intriguing insight into the expectations society holds for AI technology. However, building an intelligence system capable of matching the capabilities of the human brain is no easy feat. While the creation of such technology is a celebration in itself, what’s really impressive are the real world applications that are only just starting to appear. Imagine having a system that can not only synthesise data faster than a human, but can make better inferences, predictions, and decisions. This has the potential to revolutionise how we live, work, and interact with each other. But what will this technology look like in the space we spend 50% of our day, the workplace? According to a survey conducted by Narrative Science, 80% of company executives believe that AI solutions boost productivity. Whether this is by automating labour intensive tasks or improving process efficiencies, AI is becoming an effective part of businesses of all shapes and sizes. Workforce management companies like Tanda are heavily investing R&D into the potential of AI technology and the impact that it will have on the workplace. Managing a workforce with all the administrative work that goes along with it is no easy task. It becomes infinitely more difficult when managers lack the experience and necessary information to make complex informed decisions. Using AI technology empowers managers with actionable intelligence to make smarter decisions in rostering, wage calculations, and workforce management. What is the future of Artificial Intelligence in the workplace? Artificial Intelligence can be used in a variety of ways within workforce management technology. Firstly, predictive analytics is where AI is used as a tool to assist the user to make decisions, such as the optimal number of staff for a shift. The next step up is a completely autonomous system, capable of performing tasks independent of a human. Cognitive Rostering® for example, extends on predictive workforce analytics to create an optimised roster automatically, without human user input. So what benefits can we expect by implementing AI technology into our workforce? 1. Make faster decisions Using AI technology to automate your workforce management results in greater efficiency, profitability, and productivity. Rostering is a major pain point for businesses, due the time it takes and the impact of having too many or too little staff rostered. Automating time-consuming tasks such as rostering, assists manages to make faster decisions, and spend more time focusing on priorities. 2. More accurate decisions It’s hard to make the right decision when you don’t have all the information. There are numerous sources of data that could affect making great rosters, such as wage costs, sales data, and staff availabilities. Using Predictive Workforce™ allows managers to pull useful data sources into one system, which leads to more accurate and smarter workforce decisions. For example, you could import foot traffic data into Predictive Workforce™ with customised ratios. This will inform managers of how many staff are needed, and what specific roles are required. Thus, this enabling managers to not exceed their labour cost budgets, while also ensuring that enough staff are rostered to meet customer demand. 3. Competitive market advantage Using AI technology to manage your workforce provides an unparalleled market advantage. According to Narrative Science, “by 2020 predictive analytics will attract 40% of new investment made by enterprises”. In a time when operating and overhead costs continue to increase, AI automation assists businesses owners to improve workforce productivity for future growth. Businesses therefore need to be using predictive analytic technology to manage their workforce today, if they want to stay competitive and ahead of the market tomorrow. AI technology and predictive analytics give you the confidence to make great decisions, and capitalise on new exciting opportunities. Artificial Intelligence may well still be in its infancy, however, it is quickly becoming a necessity for businesses wanting to remain competitive. Using the best workforce management technology leads to faster and more accurate decisions, as well as a competitive advantage within the market. It is therefore vital for key personnel to ensure they are using the best technology to achieve the greatest outcome.