According to studies by Robert Half Finance & Accounting and the American Payroll Association, employee time theft typically exceeds more than 10 minutes per day per individual. For companies of all sizes, the unnecessary expense of time theft can mean the difference between profit and loss, between keeping your doors open and shutting them.
Time theft results when activities during paid work hours are not job-related. Do you know how often your workers are using Facebook, tweeting, or checking Instagram? How can you be sure your remote workforce is working, and not playing golf? Do you know how often people are coming in late, taking a little extra time for lunch, or leaving early? Are some employees covering for others by engaging in buddy punching?
Due to a trend toward more flexible workplaces, and the fact that the Internet is always as close as the nearest Smartphone, keeping track of how employees spend their time is more difficult than ever. Whether an employee fails to resist the siren song of social media during the work day, is hitting the beach before a sales call, or is showing up late and leaving early, they are stealing time from you, pure and simple.
The High Cost of Time Theft
How much could time theft cost you?
Let’s do some math.
If you pay a full-time employee $15 per hour, and they steal ten minutes every day, that employee costs you $650 per year in stolen time. If you have 100 employees, time theft costs you $65,000 per year.
As high as that figure seems, some experts believe that ten minutes of stolen time per day is conservative. They believe the average employee realistically steals almost one hour per day or 4.5 hours per week. If you have 100 employees who are stealing 4.5 hours per week, the amount of money you are losing adds up to a whopping $351,000!
How can you battle time theft? Here are ten ways:
- Clearly define time theft and state time theft policies in your employee handbook. In today’s culture many people, especially those just entering the workforce, simply don’t realize that some of their actions constitute time theft.
- Follow through on disciplinary actions. If someone is caught stealing time, show you mean business by sticking to the policies outlined in your handbook.
- Implement a system of reporting and accountability so employers are always aware of employee hours and locations throughout the workday. High-tech time and attendance software makes it easier than ever to track when employees clock in and out, as well as where they are recording time.
- Consider using an Internet security program that blocks specific individual functions, or that records websites visited. Employees are less likely to steal time when they know you’re watching.
- Monitor the time of remote employees with web-based time clocks. Instead of filling out manual time sheets, employees punch in wherever they are using a Smartphone, PC or laptop. Data is sent immediately to the system, and managers can see who is on the clock in real time. Additional GPS functions allow managers to see employee location.
- Provide time management training. Many of today’s employees simply don’t know how to manage their time. Just as you train them in areas of skill, provide learning opportunities that help them tackle time management. Most time theft that results from poor time management is unintentional, but it still has the same negative effect on your organization.
- Confirm identity. One of the biggest forms of intentional time theft is buddy punching. This occurs when one employee clocks in or out for another, to give that employee more time on the clock. Cutting-edge biometric time clock technology allows organizations to confirm the identity of the employee through high-tech fingertip scanning.
- Introduce flexibility. The more work-life balance employees have, the less likely they are to spend work time on personal matters. Provide as many flexible work arrangements as possible, and you’re likely to see performance, morale, and profits improve.
- Keep an eye on performance. Track employee performance, and keep workers on task by rewarding them for a job well done. In situations where it makes sense, such as for those in sales, connect pay to performance. In other situations, try gamification, or introducing contests with meaningful prizes, to keep your employees firmly focused on their goals. Engaged employees are less likely to steal time than those who are unengaged.
- Move from manual to automated payroll. According to a study done by Michael G. Kessler and Associates, an investigative and accounting firm specializing in corporate issues, 87% of 500 employees surveys admitted to falsifying time sheets. Automated time and attendance software that allows you to import time data directly into payroll completely eliminates this type of fraud.
Related Article of Interest: Monitor Employee Time Theft.