What is Time Theft and How Can Businesses Prevent It?

Time theft is no joke but, typically overlooked within workplaces, it's a big-ticket issue.

Employees who do time manipulation can take years for you to uncover, and what is worse, the longer it takes, the more financial toll your business faces. According to Statistic Brains, employee time theft costs businesses around $50 billion annually. Even minor inconsistencies can yield massive figures of money over time due to deceptive time clock reporting. 

The famous idiom says, "A small leak will sink a great ship."

Time theft is one thing we ought to prevent from happening as much as possible. Understanding time theft and its countermeasures will be a win for you and your company.

As you read along, you'll better understand the intricacies of time theft, different ways employees do them, and practices to nip this action in the bud. 

What is Time Theft? 

When your employee didn't work for their assigned shift yet, they receive payment; that's what you call time theft. Time theft applies mainly to employees working on an hourly-rate basis. 

Since employees can commit time clock stealing anytime, no matter the industry, time and attendance fraud isn't exclusive to a single position. However, time and attendance software will make checking for time manipulation easier. 

As for your diligently working employees, this is unfair because time theft offenders will work less but receive more money. Since you will be paying for work with zero results, your company will eventually suffer. And you know what the harsh reality of time theft is? It can produce a sky-high ripple effect in your business.

The Consequences of Time Theft 

The tendency is that even employees who work hard enough and accurately track their work hours may suffer if you have teams with time theft issues. You may not be fully aware that your team's overall productivity and attendance value is lower than expected. Low performance might be the new normal within your organisation if this keeps on. 

The likelihood of other employees getting tempted and following the same behaviour is high. If this happens, your workforce's morale will be affected negatively, which could lead to them showing up late and leaving early, taking extended time on breaks, and often using work hours for personal matters. 

That said, there is a high chance that toxic employees guilty of time theft may tempt coworkers to do the same.   

Different Means of an Employee to Steal Time 

Time and attendance fraud are widespread. It can happen regardless of the industry. Employees who try or do time theft can get rather creative with their means to avoid working. Here are some typical ways for employees to perform time theft. 

• Timecard falsification 

Timecard falsification happens when an employee gives incorrect detail about their working hours or provides misleading information to others. Such cases often occur when you track your workforce's hours via manual timekeeping systems. Good thing there are time clock applications to prevent any form of timecard falsification from your team.

• Unauthorised extended time on breaks

Employees are entitled to have their breaks; this is the law. However, there seems to be room for abuse. For example, a lunch break for 1 hour can get extended by an extra 15-30 minutes, or a rest break can also become a time for a coffee. 

• Buddy punching  

Buddy punching happens when an employee clocks in or out on behalf of a coworker. The estimated cost of buddy punching is over $370 million in wage costs per annum. Not just that, companies lose 5% of their annual revenue to internal theft—which includes buddy punching. 

• Clock in for work yet doing personal activities 

Some employees have no problem doing personal stuff while on the clock. Personal activities could include socialising with colleagues, running errands or even finding somewhere for a quick nap. 

• Persistent or excessive phone calls/texts or use of social media 

Employees making phone calls and texts while clocked in is inevitable, but if it occurs consistently, it's probably time theft. In addition, the use of social media while on the clock has also become a problem.

How to Prevent Time Stealing From Happening?

Since you now have an idea about time theft. You need to establish a solid framework against employees attempting to do fraudulent actions with their time clock. Now is the moment to carry out these solutions. Here are some proven ways to prevent any form of employee time stealing. 

• Install software that tracks time and attendance

If there's no way for you to check or validate the number of hours your employees are working, you are just leaving yourself vulnerable to time theft. One of the best ways is to install time and attendance software. A helpful tool ensuring staff are not doing unnecessary, non-work-related activities while on work time.

It also guarantees your employees are only paid based on their work hours. It also tracks delinquency, absences, productivity and other factors contributing to time theft.

• Implement communication transparency between all employees

As an employer, you should be clear about company expectations and rules for your workforce to adhere to, whether they are working remotely or on-site. You should implement stringent rules regarding what is acceptable and what is not while working. Keep away from putting any vague impressions to avoid misunderstandings. 

In addition, so as not to intimidate your employees, make them feel like they belong. Create a friendly and approachable atmosphere that allows employees to express themselves if there are issues. This way, employees are more open to talking about it instead of trying to cover it up with time stealing.

• Boost work accountability

Work accountability falls under performance management. For employees to feel more accountable for what they do, they need to be incentivised and use rostering software, which means you must set objectives, plan and monitor goals, and make employees feel they are part of the team. 

Staff are less likely to commit time theft if they feel like they're not hitting the targets or if they are failing, thus pushing themselves to be more productive with incentives in mind. 

• Understand them

As an employer, you need to understand that your staff need breaks once in a while. The workforce will function better if they don't grind their way too much. Likewise, the productivity level will spike if there is proper implementation of break structures. 

If your employees know they can relax and take breaks, they will be less likely to use work time to recharge their energies. 

• Get rid of paperwork 

One of the most common causes of time theft is human mistakes. For example, mistakenly completing hand-written timesheets can cost your business thousands. All this with just a simple lack of concentration from a team member. 

Shift to an automated digital clock time system that tracks your organisation's management, freeing time in your HR department. 

Takeaway 

If there is no proper implementation of company rules and regulations, it's likely for time theft and other related issues to continue. Although occasional mistakes are understandable, you must have an optimal automated system that handles repetitive employee errors. Remember, your business can't keep on covering payroll costs for employee time theft.

We at RosterElf provide a trusted and reliable software solution for your workforce management to prevent time theft effectively. Gone are the days of manual employee tracking processes and timekeeping. Instead, our timekeeping apps can help you and your employees record shifts that translate to a digital timesheet. 

Want to know more? Call us at 1300 353 000, and we'll be happy to assist you. 

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