What time theft costs your business – and how technology can help
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What is time theft?
Time theft is when employees report working more hours than they’ve actually done, which in turn inflates their pay. Here are some of the most common ways time theft can occur:
Inflation of work hours
This is when an employee lies – or makes an honest mistake – about their start and/or end times, which then gives the appearance of working a longer shift than they did than they did. A variation on this is pre-populating start and end times, including lunch breaks, in advance for the week. Similarly, ‘rounding-up’ work hours to the closest quarter hour or half hour is another way to inflate work hours. So, if an employee finishes their shift at 4.53pm they will round it up to 5pm. It may not seem like much, but with a large workforce, it can add up.Break times and work avoidance
This occurs when employees take overly long break times, or unauthorised breaks entirely. This can be especially prevalent in geographically dispersed work locations or when employees are constantly on the move, away from supervision. Work avoidance is harder to track without almost constant supervision but involves carrying out personal activities on the job such as scrolling social media feeds, talking on the phone, checking personal emails, etc.Buddy punching
This occurs when one employee ‘punches in’ – or clocks on – for another employee to cover for their absence or lateness. This not only costs the business money in terms of lost productivity, but it can also build resentment if it’s witnessed by other workers and management is unaware of what’s going on. Employees may start to feel resentment that people are being paid despite not showing up on time or not working at all.Fraudulent data entry
Timesheets or timesheet systems may have glitches that require the need for data to be re-entered. When these glitches occur, it’s easy for an employee to lie about their hours. And if this is done in a manual system, using physical timesheets, this may not be intentional: as timesheet details are copied across or replicated, there’s a heightened chance of human error, resulting in inaccurate numbers.
Which organisations are most vulnerable to time theft?
Time theft can occur in any organisation that does not have proper clocking processes or time & attendance systems in place. It can often go undetected when large numbers of employees are working the same shift. This might occur when a sporting event is on in a huge stadium, or during busy times in a retail chain when tracking and monitoring of employee hours can be neglected or forgotten about – often simply because everyone, including frontline managers, are so busy.
It can also go unnoticed if physical pen-and-paper timesheets are used. As mentioned, in these instances time theft may be unintentional: human error can creep in due to manager overwork or when data duplication or movement between systems is required. If written timekeeping records are kept, it’s easy to mistake a ‘6’ for a ‘5’, or a ‘3’ with an ‘8’.
What does time theft cost a business?
HRD cited research from tech comparison website Software Advice that found 43% of hourly employees have exaggerated the hours they worked in a week. A different study by Nucleus Research found that 74% of employers experience payroll losses due to buddy punching. These losses average 2.2% of gross payroll.
In a typical workplace scenario, the numbers tell the story. Say, for example, a retail employee logs an average of 10 extra minutes per day because they clock on late. With 5 employees, that’s 50 minutes per shift. If you’re paying $30 per hour, that’s 216 hours a year lost, or a total of $6,480 in wages. With multiple shifts per day, or more workers, that number rises accordingly.
How can you reduce time theft?
Smart workforce management software is your greatest ally in the fight against time theft. For example, Humanforce’s Time & Attendance is a comprehensive and powerful solution, a key component of our human capital management (HCM) suite, which is specifically designed for frontline and flexible workforces. It allows managers and HR to:
Record work accurately – Monitor and track employee activities easily, and handle shift complexities such as location, role or break changes
Utilise a flexible range of clocking options – Choose from a range of platform options to best suit your organisational requirements, including direct pin, mobile app, kiosk or biometric authentication such as facial or fingerprint scans. Geo-fencing functionality also ensures that you know that employees are where they say they are
Automate integrations and ensure compliance – Integrate automatically with existing payroll systems through the seamless generation of timesheets that are configured to calculate minimum pay and entitlements based on relevant industrial instruments (e.g. awards, employment agreements, collective agreements, etc.)
Access greater workforce intelligence – Perform powerful data-driven reporting and identify time and attendance anomalies. Users gain greater clarity to limit timesheet fraud and gain data-driven insights to improve employee and manager behaviours and conduct more efficient workforce planning
Utilise a secure, scalable solution – From hospitality and retail venues to aged care homes, organisations need solutions that can handle high volume load across multiple sites without compromising on the user experience or security
Introducing Advanced QR Clocking
Humanforce’s is always listening to the needs of business, which means our solutions are constantly evolving. The latest feature to be added to Humanforce Time & Attendance is Advanced QR Clocking, which is now available on the Humanforce Work App.
Advanced QR Clocking is:
A seamless, secure and scalable clocking solution for the modern-day workforce
A flexible and accurate method to complement or upgrade other clock-in methods
Designed and tested to be scalable and able to meet high-volume clocking requirements
Easy to use, with a simple, frictionless mobile clock-in and employee set-up experience
Designed with security in mind, including limiting unauthorised users from clocking on and submitting false or inaccurate timesheets
How does it work?
In busy, geographically dispersed work environments, it’s critical that clocking in and out of shifts is intuitive and fast. Advanced QR Clocking enables seamless clocking in 4 simple steps:
The benefits to employers and employees
Time and attendance solutions and HCM suites in general benefit both employers and employees. Outcomes such as accurate pay for work undertaken, appropriately staffed shifts, a unified and seamless user experience for people from diverse backgrounds and locations, and the creation of a fairer, more positive work culture are just a few of these mutually beneficial outcomes.
Advanced QR Clocking enables:
Work-time precision. Track and monitor attendance easily, assess labour activities accurately, pay accordingly, and ultimately make smarter scheduling decisions
Secure authentication. Limit timesheet fraud and ‘buddy punching’. Unique QR codes assigned to authorised employees are refreshed every 3 seconds
Easy deployment. Set up employees quickly in 2 simple steps; grant employees permission and configure to location
Flexibility. The option to either complement or upgrade current clock-in procedures
Faster timesheet approvals. Save time and effort with every shift automatically generating timesheets for faster, more accurate and more compliant pay runs
What else can employers do?
Technology is critical but it’s not the only way to combat time theft. It’s also worthwhile looking at the policies in place and your organisational culture. On the former, it’s important to codify policies and procedures. Ensure people understand what’s expected of them, the rules that apply to them, and what the ramifications are if they breach those.
In terms of organisational culture, if employees feel they are being treated fairly and with respect, they are less likely to commit a crime such as timesheet fraud. If they feel they are nothing more than a cog in a big machine, with little understanding of how their contribution helps the business, that may fuel the flames of disengagement and dishonest behaviour.
Trust plays a major role in this. How can managers build trust?
Do what you say, and don’t over-promise and under-deliver
Aim for transparency in all interactions
Give a voice to your employees
Ensure there are feedback channels – and follow through on feedback received
Schedule regular manager catch-ups so that a more rounded picture of an individual can be painted
Create a work environment that recognises their hard work
Set clear goals and expectations – and hold people accountable to them
Finally, look at the roles, responsibilities and workloads of individuals, especially line managers. If their direct span of control is too wide, they’ll struggle to focus on managing their teams and corners may be cut.
With human beings being what they are, time theft will unfortunately always be a challenge. However, with the right culture, policies and technology in place, it’s not an insurmountable challenge.
About Humanforce
Humanforce is the best-in-one platform for frontline and flexible workforces, offering a truly employee centred, intelligent and compliant human capital management (HCM) suite – without compromise. Founded in 2002, Humanforce has a 2300+ customer base and over half a million users worldwide. Today, we have offices across Australia, New Zealand, and the UK.
Our vision is to make work easier and life better by focusing on the needs and fulfilment of frontline workers, and the efficiency and optimisation of businesses.
To learn more about how Humanforce’s solutions, including our Advanced QR Clocking feature, can help automate people processes in your business, please contact us.