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Employee Time Theft and way To Prevent It

4 Different Types Of Time Theft and 5 Ways To Prevent It?

A successful business is built on many pillars, but most important of all is a reliable workforce. If you can trust your employees with respecting the rules at the workplace, it becomes easier to focus on other aspects of business growth. However, time theft can be a real nuisance if not dealt with.

According to several studies, time theft is one of the biggest reasons for the loss in business. A study estimates that most U.S. companies lose 20% of every dollar earned because of employee time theft.

The most widely implemented scrutiny method to prevent employees from stealing business property is installing CCTV cameras on the premises. However, this doesn’t work when employees are doctoring timesheets or punching in for a colleague.

You will be surprised to know that 30% of business failures are caused by some sort of employee theft or embezzlement. While one may argue that time theft is not the same as the removal of physical property, it nonetheless results in losses as it escalates labour costs and also wastes financial resources.

If you are struggling with the same issue and want to put an end to employee time theft, it is recommended that you start by recognizing how time theft can take place.

Simply put, time theft is when employees are not working for the hours they are paid for. Although, once in a while it is acceptable, if it is a regular practice, it amounts to time theft. According to a study, an average employee steals 4.5 hours a week from their employer, that’s a total of 6 work weeks every year.

The most common ways in which employees do time theft are:

1. Buddy Punching

Buddy punching is when an employee punches into the time clock for a colleague if they are running late or leave early. It is the easiest way to trick the attendance system into thinking that the employee worked for the full day. As per an American Payroll Association study, more than 75% of companies lose money due to the practice of buddy punching.

2. Extended Breaks

Arguably, most innocent-looking time theft is when employees take too long breaks. While it is known that taking regular breaks keeps the productivity high in employees, but it must be closely monitored.

Turning a 60-minute lunch break into a 75-minute break or extending 15-minute breaks by adding 5 minutes extra might not seem too drastic but when done consistently, the minutes add up pretty quickly. To avoid this issue you should implement a lunch break policy in your organization.

For instance, smoke breaks have proved to be costly for companies. A study found that an average smoker takes roughly 6 days of smoke breaks a year, and this is only an average figure. For some industries, it adds up to 20 days a year.

3. Time Clock Theft

Time clock theft is when an employee manipulates or lies about the time they work for. Often, employees do not do it with the wrong intention and round up their hours to make it easier for payroll to calculate the work hours, however a few minutes every day start to add up over weeks or a month.

But some employees purposefully commit time theft. They can do it by simply asking their work buddy to clock in for them regularly. Others might intentionally not clock in and then lie about it later on. Another tricky practice is to clock in before they start working on the floor. Employees might enter the building, but they aren’t working when they should be.

4. Excessive personal time

Working hours are more productive when employees do not feel bound or restrictive. This is why it is a positive perk to allow employees to take a personal call or reply to a personal email when emergencies happen. However, when an employee starts to abuse the system and consistently takes excessive personal time it moves into the time theft category.

The most common instance of excessive personal time is when an employee runs their own business while at work. It can be anything, replying to customer emails or reaching out to them on social media platforms.

How to prevent time theft

Now that you are aware of how time theft is usually committed by employees and how disastrous it can be for your business, it is time to nip the evil in the bud.

1. Revise or Establish Time Theft Policies

Do you have clear time theft policies in place? If you do, when was the last time you reviewed the policies?

The time theft policies must be strategically framed such that your employees do not feel any unnecessary compulsion. Be aware of what you are asking of your employees. Make sure the policies are relevant and understandable. It is also important to adhere to employment standards in time theft policies.

Time theft policies that are too restrictive will make your employees feel unfair and ultimately result in a low rate of compliance. Implementing time theft policies that are employee-friendly can make a huge difference in your company’s morale.

2. Use tech to enhance accountability

Punch clocks and manual attendance registers are not going to make an impact and resolve the issue of time theft. You need to upgrade to more reliable attendance solutions like biometric systems. The fingerprint attendance system is the most commonly used biometric system that has replaced card swiping methods.

However, in recent years, the pandemic has highlighted the need for systems that minimize human contact. Facial recognition attendance systems provide a solution to this issue. Attendance systems like Truein work on AI algorithms that allow employees to use their smartphones to clock in with face recognition.

3. Develop employee morale

When you increase employee morale their engagement and productivity increase simultaneously. It also makes employees more loyal to the organization. Often employee productivity decreases when workers see other employees getting away with time theft.

Implementing time theft policies and using advanced attendance systems will curb such getaways, but what about those who are honest with their work hours?

Rewarding and recognizing such employees will encourage employee morale. Furthermore, you must try to create an environment of transparency, honesty, and trust. This will prevent time theft.

4. Be realistic with expectations of your staff

There lies a big difference between encouraging your workers to boost productivity and overworking them. Ensure that you are setting up realistic goals to be achieved by employees including managers.

If you set up unrealistic expectations that lead to break time getting cut or over time, your employees will start looking for ways to compensate for lost time. This is something you will not want. Be open about your expectations with your employees and communicate what is permitted during work hours and whatnot.

5. Employ software to prevent employee time theft

No employee wants to manually put in work time or manage attendance sheets. You should work on making attendance systems less tedious. Smart attendance systems like Truein streamline the overall process and also reduce the cost incurred in hiring the human resource to manage attendance records.

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FAQs About Employee Time Theft

Is employee time theft illegal?

While no legal policies are governing how the instances of time thefts must be dealt with, but companies have their policies. In some cases, time theft makes for the grounds for suspending an employee.

Is time theft common?

Yes. According to a study, 75% of employees do time theft at least once.

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