Time Theft: Top 3 ways employees steal time and how to stop it

Rosie Ramirez

29 January 2019    |    read

The loss of productivity and profits due to time theft has been an enduring problem for many employers across industries. It can come in many forms, from clocking out too early to slacking off at work. While it can be hard to determine exactly how much it costs, a 2017 PollFish survey revealed that the U.S. economy loses approximately $373 million to time theft every year. This is true everywhere else, not just in the US. Paying unproductive employees for their time can make companies lose millions. Below are the top 3 ways employees steal time, and what you can do about it. 1. Buddy Punching The Problem: Buddy punching occurs when one employee clocks in or out for another as a favour. Employees do this to avoid being reprimanded. They often believe that this act is not inappropriate, as it only affects a few minutes of the total hours. But some employees use buddy punching to get paid for hours or even days they didn’t work. This is more prevalent in off-site locations where monitoring systems are lax. A 2008 Nucleus Research report showed that 19% of employees admit to buddy punching. The Solution: Confirming the identity of the person clocking in or out is the easiest way to solve buddy punching. Previously, employers opted for fingerprint clock in technology but this has become less popular with increasingly strict biometric privacy laws. In fact, a data privacy complaint was filed in Illinois against a biometric equipment provider. Because of this, photo-verified clock ins are the safest way to confirm an employee’s identity. A manager can monitor if a clock in matches the employee via cloud data, regardless of where they are working. Read more: Why Fingerprint Scanners Don’t Work for Time and Attendance 2. Time Clock Deception The Problem: Time clock deception, or timesheet falsification, happens when an employee inflates the hours they worked. A 2015 American Payroll Association (APA) study found that 43% of hourly employees surveyed admit to exaggerating the amount of time they work during their shifts. Further, a shocking 25% of employees surveyed report more hours than they actually worked more than 75% of the time. APA estimates that a business that pays out $1 million in annual payroll could be losing up to $70,000 each year due to timesheet falsification. The Solution: Manual forms of timesheet monitoring is the most susceptible to deception. Companies who allow employees to write down their own clock ins and outs will often have no way of knowing whether the information is accurate or not. Even 30 minutes of falsified timesheets can already cost money for businesses. The only solution is to invest in a program that accurately records clock ins and outs, and generates timesheets at the same time. Tanda’s workforce compliant timesheets even calculates precise shift costs using either a managed award or EBA. Read more: The Digital Workforce Success Revolution: Why you need to shift to cloud-based HR today 3. Extended Breaks The Problem: Employees can sometimes take breaks longer and more frequently than they’re supposed to. For many companies, a 30-minute break extension, or five 10-minute smoke breaks, may not seem much. When done large-scale however, it can have a real impact on productivity. Smoke breaks in particular accounted for the highest cost in lost productivity, according to a 2013 Ohio State University study. The study further suggested that U.S. businesses pay almost $6,000 per year extra for each employee who smokes. The Solution: Enabling employees to clock in or out for their breaks is one way to shift responsibility for their time to them. Because automated time clock solutions can be programmed to accommodate breaks, this will come at no extra cost, and will enable businesses to monitor employee breaks better. But because this affects compensation, employers should take care to abide by laws that apply to breaks. They should also ensure that they are not deducting pay illegally. Conveniently, Tanda’s system is able to flag anomalies in breaks, and makes sure the pay interpretation is always legally compliant, wherever you are in the world. Read more: Only a Matter of Time: Punctuality and attendance in multicultural workplaces To eliminate time theft, it is essential to create a work environment with the resources to monitor and prevent it. Investing in the right software will take care of many of the administrative issues that contribute to letting time theft slide by. After these systems are in place, it is also important to increase employee engagement by making sure your onboarding process is effective, and rewarding attendance the right way. These strategies will enrich the work experience and drive productivity to benefit both the employees and the business as a whole.

The loss of productivity and profits due to time theft has been an enduring problem for many employers across industries. It can come in many forms, from clocking out too early to slacking off at work. While it can be hard to determine exactly how much it costs, a 2017 PollFish survey revealed that the U.S. economy loses approximately $373 million to time theft every year. This is true everywhere else, not just in the US. Paying unproductive employees for their time can make companies lose millions. Below are the top 3 ways employees steal time, and what you can do about it.

1. Buddy Punching

The Problem: Buddy punching occurs when one employee clocks in or out for another as a favour. Employees do this to avoid being reprimanded. They often believe that this act is not inappropriate, as it only affects a few minutes of the total hours. But some employees use buddy punching to get paid for hours or even days they didn’t work. This is more prevalent in off-site locations where monitoring systems are lax. A 2008 Nucleus Research report showed that 19% of employees admit to buddy punching.

The Solution: Confirming the identity of the person clocking in or out is the easiest way to solve buddy punching. Previously, employers opted for fingerprint clock in technology but this has become less popular with increasingly strict biometric privacy laws. In fact, a data privacy complaint was filed in Illinois against a biometric equipment provider. Because of this, photo-verified clock ins are the safest way to confirm an employee’s identity. A manager can monitor if a clock in matches the employee via cloud data, regardless of where they are working.

Read more: Why Fingerprint Scanners Don’t Work for Time and Attendance

timesheet-deception-employee-schedule

2. Time Clock Deception

The Problem: Time clock deception, or timesheet falsification, happens when an employee inflates the hours they worked. A 2015 American Payroll Association (APA) study found that 43% of hourly employees surveyed admit to exaggerating the amount of time they work during their shifts. Further, a shocking 25% of employees surveyed report more hours than they actually worked more than 75% of the time. APA estimates that a business that pays out $1 million in annual payroll could be losing up to $70,000 each year due to timesheet falsification.

The Solution: Manual forms of timesheet monitoring is the most susceptible to deception. Companies who allow employees to write down their own clock ins and outs will often have no way of knowing whether the information is accurate or not. Even 30 minutes of falsified timesheets can already cost money for businesses. The only solution is to invest in a program that accurately records clock ins and outs, and generates timesheets at the same time. Tanda’s workforce compliant timesheets even calculates precise shift costs using either a managed award or EBA.

Read more: The Digital Workforce Success Revolution: Why you need to shift to cloud-based HR today

Time-Theft-Buddy-Punchin

3. Extended Breaks

The Problem: Employees can sometimes take breaks longer and more frequently than they’re supposed to. For many companies, a 30-minute break extension, or five 10-minute smoke breaks, may not seem much. When done large-scale however, it can have a real impact on productivity. Smoke breaks in particular accounted for the highest cost in lost productivity, according to a 2013 Ohio State University study. The study further suggested that U.S. businesses pay almost $6,000 per year extra for each employee who smokes.

The Solution: Enabling employees to clock in or out for their breaks is one way to shift responsibility for their time to them. Because automated time clock solutions can be programmed to accommodate breaks, this will come at no extra cost, and will enable businesses to monitor employee breaks better. But because this affects compensation, employers should take care to abide by laws that apply to breaks. They should also ensure that they are not deducting pay illegally. Conveniently, Tanda’s system is able to flag anomalies in breaks, and makes sure the pay interpretation is always legally compliant, wherever you are in the world.

Read more: Only a Matter of Time: Punctuality and attendance in multicultural workplaces

To eliminate time theft, it is essential to create a work environment with the resources to monitor and prevent it. Investing in the right software will take care of many of the administrative issues that contribute to letting time theft slide by. After these systems are in place, it is also important to increase employee engagement by making sure your onboarding process is effective, and rewarding attendance the right way. These strategies will enrich the work experience and drive productivity to benefit both the employees and the business as a whole.

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About the author

Rosie Ramirez

Our team's goal is to provide practical advice for business owners and managers across industries.

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