More and more companies have been investing in streamlining resources and improving business efficiency. However, statistics have shown that about 75% of businesses in the U.S. are affected by various forms of employee time theft.
Schemes like time inflating and buddy punching may seem negligible, but the financial burden can be significant, especially for small businesses.
If you’re an employer or a business owner, you want your employees to use company time strictly for work-related activities. After all, time is considered money in a business setting, and you want your employees’ time to be used for maximum productivity.
Understanding Time Theft
Time theft happens when employees do activities that are not work-related while on company time. But rather than a case of outright theft where tangible items are involved, time theft is more commonly considered a misconduct issue and often not intentional.
An example is when an employee clocks in at 9:05 a.m. and clocks out at 4:57 p.m. even though their shift is from 9 a.m. to 5 p.m. As a result, they are being paid for the entire shift while working on time.
Losing small minutes like this may seem insignificant at first. However, the compounding cost can hurt the business if everyone does it. For example, if you calculate the missing five minutes daily for an entire year and pay that employee $20 per hour, you will pay about $416 more for time not worked.
Though no federal law makes time theft illegal, employees committing it can still face severe consequences. In some cases, a company may impose disciplinary action or contract termination. For severe time theft cases where an employee is found to be falsifying records through fraudulent activities, criminal charges may be filed.
Common Types of Employee Time Theft
It is challenging to curb time theft in a company because it can happen in many ways, some intentionally and some not intentionally on the employee’s part. Below are some of the most common types of time theft to watch out for:
Excessive Breaks
Some employees may habitually go on extended breaks or multiple short breaks. This is one of the most common and most difficult to track among the types of time theft. Most companies don’t require employees to clock in and out for their breaks, so excessive breaks go undetected.
Inflating Work Hours
While some cases of inflated work hours are not intentional, there are cases where timesheets are falsified and time clocks are manipulated.
Doing Personal Activities on Company Time
Sometimes, an employee needs to deal with a personal matter while still working. This should be fine if authorized. However, if an employee frequently does it, the lost time can add up in the long run.
Getting Distracted
In the digital age, social media and web surfing are among the most common culprits when employees get distracted. Aside from the lost time, employees may also be unable to focus on their work, which can result in a decline in work quality.
Buddy Punching
Buddy punching is when an employee asks a coworker to clock them in or out if they arrive late or leave early. You should watch out for this type of time theft, whether you are using manual or electronic timekeeping.
How to Prevent Employees From Committing Time Theft
As a business owner and employer, you already have a lot of responsibilities, and dealing with employee misconduct can be a challenge. Thus, prevention is the best solution. From the get-go, implement measures to discourage employees from committing time theft.
First, make sure to have a clear policy on time theft. Create a guideline and clear set of rules on how employees should spend their time while clocked in. Next, make sure to enforce your policy with exceptions. Poor enforcement may cause confusion and may result in the opposite of what you want to achieve.
Using a time-tracking software is also a good idea. Time-tracking programs like biometric tracking and geofencing will help with accuracy as well as prevent time theft. However, you should also avoid excessive measures, as it can backfire if employees become dissatisfied with your policies.
Happy Employees Are Productive Employees
While time theft prevention is essential, you should also remember that people are more productive in a stimulating environment.
Let your employees know that you can also be flexible, and anyone can request time off, if necessary. A flexible arrangement also promotes a culture of trust among colleagues and reduces opportunities for employees to engage in time theft.
