How to Eliminate Time Theft

Alexandra Franco

5 August 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.   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 creating rotas to meet labour budgets and KPIs, but also take control to enforce the schedule. 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 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 £227/ month and over £3,324/ year (based on the average minimum wage for April 2017). How do you 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 Systems such as paper timesheets, excel spreadsheets, or outdated Bundy clocks, are highly susceptible to allowing time theft in a business.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 get 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. 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.

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.  
  • 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 creating rotas to meet labour budgets and KPIs, but also take control to enforce the schedule.

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 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 £227/ month and over £3,324/ year (based on the average minimum wage for April 2017).

How do you 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 get 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.

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.

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Why Fingerprint Scanners Don’t Work for Time and Attendance

The ability to quickly identify and verify individuals has been a crucial skill in human society, since the start of civilisation. Where previously face-to-face recognition would have sufficed in tribes and small villages, thanks to today’s rapidly growing global population we require more tools to quickly identify who someone is. In the workplace, the need to identify individuals is particularly important, as it’s often tied to staff attendance, payroll, and workplace security. Throughout the years various solutions have been used to verify staff attendance from paper time sheets, to the Bundy Clock, to fingerprint and biometric scanners. Despite the best efforts of some die-hard fans, the fingerprint scanner has reached its limit, being surpassed by the electronic time clock. With so many other solutions available at our fingertips, why are some people so desperately clinging to their fingerprint scanner? Surely we’ve all seen enough spy movies to know fingerprint scanners aren’t foolproof, let alone feasible in today’s day and age where most of the fun comes from trying to fool the system. And yet, it’s something that we still occasionally hear, “why don’t you have fingerprint scanners?” So to put the debate to rest once and for all, here are three reasons why fingerprint scanners don’t work. And before you start saying, ‘but what about this…” here are three great reasons why the electronic time clock has surpassed the fingerprint scanner. 3 Reasons why fingerprint scanners don’t work to track staff attendance 1. They’re Expensive No matter which way you look at it, fingerprint scanners are expensive equipment. Despite the fact that the technology has been around for years, the cost of the device still remains relatively high, potentially setting you back a few thousand dollars. In addition to the device, the cost of the integration between the scanner and corresponding system can be expensive to build. The scanners are delicate and aren’t always built to handle the hundreds of fingerprints pressed onto them throughout their lifetime. Which brings me to my next point… 2. They’re Unreliable Unlike your favourite FBI crime-show encryption-grade biometric scanners, workplace fingerprint scanners are notoriously unreliable. In order to correctly identify and record an individual, fingerprint scanners require a clear image or impression of your fingerprint. Fingers that are dirty, greasy, cold or wet for example, often don’t register on the scanner, making it hard to both clock out and verify the individual. Employers who prefer to use fingerprint scanners, do so because they think it’s easier than remembering a passcode. However should the fingerprint scanner fail to register the scan, some systems will request a passcode. Not only is this an additional hassle to staff who are trying simply to clock in or out, but it also opens the window to time theft through buddy clocking. 3. Maintenance is a pain As previously mentioned, fingerprint scanners are not cheap. They’re a costly purchase and are even more expensive to repair or replace when they wear out. Repairing a broken scanner requires a specialised technician and often costly parts. On the occasion that it is easier to replace than repair, users often run into more problems as they are not readily available at your local JB Hi-Fi or electronics outlet. On top of this, users often experience issues around the device’s durability, which lead to additional maintenance costs and ultimately a new device down the track. Introducing the 21st Century solution Electronic time clocks are the most robust, user-friendly, and affordable solution to record staff attendance. According to Statista, 38.59 million British people are expected to own a tablet device this 2017.  Leveraging this statistic, a tablet-based time clock like Tanda can provide an effective and consistent solution to time theft, streamlining your entire payroll process. 3 Reasons why electronic time clocks are the market leading solution: 1. Affordability Tablets in their various forms have started to become more commonplace in businesses of all sizes. This is thanks to more core business functions such as POS, inventory, and payment processing, becoming available on tablet devices. This technology is providing business owners with greater mobility to engage with customers, as well as streamlining core business activities in one device. Time Clock tablets are easily accessible, affordable and present a number of additional benefits to a business looking to improve their customer offering. 2. Robust and reliable. Thanks to the prevalence of tablet usage, most people are familiar with how to use a tablet and how they should be treated. Tablets are touch-screen based and as such built to handle lots of little fingers pushing and tapping the screen. Tanda’s Time Clock verifies staff attendance through photos and PIN code verification. Which means that unlike a fingerprint scanner, it doesn’t matter if staff have dirty or wet fingers, they’ll still be able to clock out the first time around. The timestamp and photo verification also make it quick and easy for managers and business owners to quickly check that the right person has clocked in and out for the correct shift. 3. Cloud-based for more options Using a cloud-based Time Clock solution like Tanda provides users with more options, which enable rather than restrict the user. Software maintenance and upgrades are not required, as they’re done automatically in the system. Devices are easy to replace and interchangeable, and should the system connection be disrupted, all clock in data is stored locally and uploaded to the cloud later. In addition to this, as a backup, users can access the Time Clock app through a browser on a desktop. Using a cloud solution to track staff attendance provides unparalleled opportunities to streamline additional business administration tasks, as well as providing greater insight into labour costs, staff punctuality and staff engagement. Workplaces are busy places, and managers have much better things to spend their time on than trying to get the fingerprint scanner to work. Using electronic Time Clocks to track employee attendance allows staff to clock in quickly and efficiently, so that they can get out of the backroom and working in your business. Because at the end of the day, you need a system that is affordable, reliable, and accessible, so that you can get on with paying staff and focusing on your business.

Rota & Compliance UK    |   

Illinois Supermarket Chain Sued for Millions over Using Biometric Data for Time Clocks

As reported by Supermarket News, Mariano’s, a Chicago-based supermarket chain, is currently facing multiple lawsuits for their alleged violation of the Illinois Biometric Information Privacy Act. Also known as BIPA, the law, among other provisions, explicitly prohibits any private entity to collect biometric data without the owner’s permission. It also mandates the private entity to protect biometric data within reasonable care. Former employees of the supermarket chain claim that their employer violated the BIPA when they were required, without obtaining prior written permission, to record their attendance with their fingerprint on a biometric time clock. The plaintiffs also claim that the employer never provided a written document that outlined the specific purpose of data collection, how it will be stored, and how it will be destroyed. Damages could reach up to 10 million US dollars (or around 8 million pounds.) The Burden for Biometric Time Clock Users Biometric time clocks are favoured by a lot of businesses for its accuracy. However, unlike company IDs, people can’t request for a replacement fingerprint (or a new iris) if the biometric data fall into the wrong hands. That’s why it wasn’t a surprise that the state of Illinois passed a law that strictly restricts its use. This can prove to be more burdensome than beneficial to any business owner who is using biometric time clocks in their business. Time Clock Software: Accuracy Without the Hassle Tanda’s time clock software accurately tracks employee time and attendance without the need for biometric data. The application takes a photo* of employees as they clock in and out and stores it with their digital timesheets. At any time, managers and business owners can review it to verify their attendance. And all employee information is encrypted and stored securely in data centres with best-in-class security protocols. Biometric time clocks can potentially give your business more problems than benefits in the long run. Switching to a time clock software such as Tanda gives you the accuracy you need for time attendance, plus other features, with zero stress. *Photos are not considered as “biometric identifiers” by the BIPA

Rota & Compliance UK    |   

Improve Employee Attendance with a Rewards Program

Tardiness can be a pressing problem for businesses. Having a person or two late for work means that some tasks can’t be done on time. And for businesses such as retail stores and restaurants, your staff will have a hard time covering for customers if some people are late for their shift. According to a CareerBuilder survey, 29% of respondents admitted that they were late for work at least once a month. 49% blame the traffic for their tardiness, 32% blame it on oversleeping, while the rest blame bad weather, procrastination, and “too tired to get out of bed.” Deducting pay for tardiness and unexcused absences is one way to ensure employee attendance. However, rewarding good behaviour also helps make sure that more people come to work on time. That is why we recommend that your business have an employee attendance incentive program in place. Here are some suggestions on what cool incentives you can provide, as well as tips to make sure your program is a success. Free Breakfast The reward could be as simple as a nice meal out of the office. At the end of the month or quarter, ask those who didn’t come in late or had unexcused time off to have breakfast with you at a restaurant of their choice before the start of the workday. Spend that time to express your appreciation for their dedication to the business through their perfect attendance record. Extra Time Off Incentivise staff that always come on time by giving them extra time for themselves. You can the most punctual employee for the month the option of leaving work one or two hours early on a Friday, giving that person a headstart for the weekend. You can also reward him or her a much-deserved vacation with extra paid leave allowances. Free Training People love to work at a company that gives them opportunities to grow by learning new skills. Your employees will be more motivated to come to work on time if they know that they can attend training seminars as a reward. It’s a win-win incentive, as the knowledge your staff will gain will also positively impact your business. Make It a Success An employee attendance rewards program will only be effective with proper execution. Have a small kickoff event at the office, where everyone gets to know the program’s guidelines and rewards. Regularly remind staff through email messages and posters, motivating them to always come to work on time. And finally, do away with manual timekeeping methods and switch to a time and attendance software. It will help you accurately record employee clock-ins to find out who among them will receive rewards. With Tanda, managers can easily find out who among the staff is the most punctual with the attendance report feature. To get this report, log in to Tanda, and from the dashboard go to Reports > Attendance Reports. Clicking on an employee’s name lets you know how punctual they are for any given time period.

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About the author

Alexandra Franco

Alex was a former Business Manager for Tanda.

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As reported by Supermarket News, Mariano’s, a Chicago-based supermarket chain, is currently facing multiple lawsuits for their alleged violation of the Illinois Biometric Information Privacy Act. Also known as BIPA, the law, among other provisions, explicitly prohibits any private entity to collect biometric data without the owner’s permission. It also mandates the private entity to […]

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Tardiness can be a pressing problem for businesses. Having a person or two late for work means that some tasks can’t be done on time. And for businesses such as retail stores and restaurants, your staff will have a hard time covering for customers if some people are late for their shift. According to a […]

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