You know the saying time is money. While for most businesses this really is the case. Time is a precious resource and how companies decide to use their time matters, which is why avoiding time theft and misuse of employee time also matters.
Learn more about common employee time theft issues and how to implement better time and attendance policies.
What is Time Theft?
Time theft occurs when employees steal time- aka any improper use of the time that employees are paid for. Although sometimes small offenses, time theft over time can be costly for the company. Additionally, some types of time theft are more serious and quickly can take a toll on companies.
According to Forbes, the average employee steals around four and a half hours of work a week. Thus, this isn’t just some companies' problem, learning how to deal with time theft is something most companies should consider.
Types of Time Theft
Employee time theft may look like a couple of different things, some types of theft may be more explicit, like rigging time clock or time tracking in some way, while others are more subtle like using your phone for personal time.
Here are some common ways that employees may be taking advantage of time:
1. Time Card Fraud
Timecard fraud is when employees are improperly using their time cards. This might be clocking in sooner than work starts or clocking out much later after they are done.
Manual time clocks or attendance sheets make it easier for employees to manipulate their times to not be accurate in their work.
2. Buddy Punching
Buddy punching is a specific time card theft. Buddy punching is when an employee has another employee (or buddy) punch in for the early or punch out for them late to extend their hours.
Buddy punching might originally occur when an employee is running late and doesn’t want it to be reflected in their work hours. But over time this might become any time certain employees need to leave early or will arrive late.
According to a payroll report by the American Payroll Association, 75% of companies lose money due to buddy punching.
3. Long Lunches and Extended Breaks
This is most likely exactly what you think it might be long lunches, extended smoke breaks, or taking time off during the middle of the day that’s not accounted for. These breaks include any time spent past the typical time allotted.
4. “Goofing Off”
Although probably not considered an official term, goofing off is a common misuse of time. Goofing off consists of any, playing, joking, or general misuse during the job and instead of the job.
Of course, you want your employees to have fun and shouldn’t expect all seriousness, but goofing off, in this case, takes it to a new extreme where no work is done.
5. Internet Time Theft
Internet time theft is when you give employees access to the internet (or general electronics) for work, and instead of working, they are looking at other websites, social media, streaming content, or misusing the internet in some way.
The average amount of time Americans spend on their cell phone is about 5 hours a day, meaning 25 hours a week (during the workweek), so you can see how internet misuse could quickly get out of control. This is a common, more subtle theft of time that is important to address through time and attendance policies as well as internet policies.
6. Swipe Card Shenanigans
Swipe cards are used to control access points or serve as a time card or time tracking. But a common theft tactic is purposefully forgetting the card.
7. Hide and Seek
Hide and seek the popular child's game is not so fun at work! This theft of time consists of when employees hide or avoid work.
For example, imagine a boss is trying to find an employee to help them with something, and are searching and searching only to find an employee in the back hiding around.
8. Personal Activities on Company Time
A misuse for both employees on a timecard system and not on a timecard system is using company time for personal and non-work-related activities. This could consist of phone calls, emails, appointments, errands, or excessive personal time.
What Time Theft is Costing Your Company
You may not consider a lot of these time thefts as “theft” making it easy to look over and it’s understandable that depending on your business model, some may be more concerning than others. But the fact of the matter is that all types of time theft can lose your company money over time. What seems like small offenses add up to large offenses and drain your company.
To help illustrate this drain, here are a couple of scenarios:
Buddy punching theft
Imagine you have two employees that are using buddy card punching. About once a week, one is running late and the other leaves a bit earlier, but they simply punch in or out for each other. Let’s say they both are paid $15 an hour.
Weekly cost: $30-$60 lost wages
Monthly cost: $120-$240 lost wages
Yearly cost: $1,440-$2,880 lost wages
This means that you are looking at thousands of dollars in loss per year for just an hour or so for two employees, and this doesn’t even count the loss in productivity.
Internet time theft
Those that are misusing the internet are most likely doing so often and thus end up being more than just a one-time offense. For example, the average person uses their phone 5 hours a day for the internet, social media, and personal use. Now let’s say that person is using 2 of those hours at work on their phone and makes $30 an hour.
Weekly cost: $350 loss wages
Monthly cost: $1,400 loss wages
Yearly cost: $16,800 loss wages
This is a huge sink of cost! And it doesn’t even account for internet price and loss of productivity due to internet use.
That being said, you should also note that it's not just money companies lose with time theft, it's also employee morale. A company with lots of time theft is likely to produce a culture of mistrust among employers and employees.
Want to learn more about how you can learn more about your workforce and culture based on data? Check out these talent management metrics.
Best Tactics to Stop Time Theft
As you can see, time theft can add up to costly endeavors for your company without systems to prevent it. Here are a couple of ways you can prevent time theft.
1. Use an automated time clock solution
Getting away from manual time cards, punch cards, and clocks makes it harder for employees to abuse the system.
Implementing attendance software can automate employee clocks and make time cards more reliable.
2. Create clear, specific time and attendance policies
In addition to attendance software, set clear expectations of when to arrive, when employees can leave, and take breaks.
Now, this doesn’t have to mean that the policy is incredibly strict, if anything, a generous policy may mean that employees follow policies better. However, setting clear guidelines for different scenarios and time and attendance policies at least gives your employees something to follow through on.
3. Follow through on procedures and disciplinary actions
Equally important is setting up what will happen when specific policies are broken. Noticing what policies are being broken and having consequences helps ensure employees are held accountable.
4. Develop employee morale to deter time theft
Having generous policies, and creating a positive work culture can help employees stay on track. However, when employees are unmotivated or feel they are working too hard, it may be more tempting to break time rules and policies.
Time theft doesn’t happen because employees want to, it often happens because they can and they feel unmotivated otherwise.
Find all your human capital management needs here at CAVU Human Capital Management.