I don't know about you, but the phrase "time theft" makes me think of intergalactic space capers. I mean, how could anyone but futuristic robots or beings from other planets steal time?
Actually, time theft happens right here on Earth. And according to Deputy.com, it happens pretty frequently, with the average employee stealing over four hours per week from their employer.
Even if your employees' time theft is below average, small amounts of "stealing" can still add up over time. Say you have one employee who clocks in a little bit early or clocks out a little bit late to increase their shift time, and say they do that every day. By the end of the year, you'll have paid them hundreds of dollars for hours they didn't work.
A couple hundred dollars is a relatively small amount of money. But for many small businesses, a couple hundred dollars can mean a lot. And if more than one employee develops the same bad habit of stealing a little bit of time per day, a couple hundred dollars per year can turn into a couple thousand.
How can you prevent time theft at work? Below, we'll look at a few ways you can guard against employees stealing company time as well as a few of the most common ways employees commit time theft.
At a glance: Ways you can prevent employee time theft at your business
- Find ways to boost employee morale and engage with employees.
- Invest in time clock software for accurate time tracking.
- Use GPS tracking or geofencing to keep track of mobile or off-site employees.
- Use screenshots and URL trackers to keep employees on task online.
- Invest in biometric time clocks to prevent buddy punching.
Overview: Time theft definition
Time theft occurs when employees get paid for hours they didn't actually work. It's as simple as that.
I'm not talking about hours or minutes devoted to necessary break times or, for mobile employees, travel between jobs that's typically compensated. I'm talking about deliberate reports of hours logged where employees didn't actually do the work they were being paid to do.
Time theft can happen for a number of reasons, but the main one is that, depending on how you track employee hours, time theft can be difficult to detect or prove. Plus, most employees likely see time theft as relatively harmless.
A few minutes here or there, or a couple minutes tacked onto the employee schedule break time doesn't seem like a big deal to most people.
And unless it's a deliberate pattern of behavior, small and irregular instances of time theft probably aren't a huge deal to most managers or business owners.
But when time theft at work becomes common among many employees, that's a different story. Widespread time theft can be a sign of low morale and productivity for your entire workforce. For business owners, time theft has an effect on your bottom line.
Let's take a look at some of the ways employees commit time theft so you can be on the lookout.
How employee time theft occurs
If you're looking at your employees' timesheets and thinking something doesn't add up, you might be right. Maybe less work was completed than you expected. Or maybe you notice that one employee never seems to leave on time.
If you think employees are stealing time at work, below are a few things to look out for in their behavior.
1. Misrepresenting their time worked
Clocking in early and clocking out late are some of the most common ways employees commit time theft in the workplace. Especially if you're using pen and paper for employees to note clock-in and -out times, numbers can easily be fudged without being easily verifiable.
However, even with an accurate tracking tool, such as time clock software, employees can still find ways to misreport their hours worked. In many time clock programs, for instance, clocking in or out 15 minutes early or late will prompt the system to round up your hours worked.
According to TimeClick.com, employees who steal time typically add over 20 minutes to their shifts and embellish almost 40% of their shifts worked.
Taking the numbers from the survey, let's look at an example. An employee is scheduled for five shifts per week and is paid $15 per hour. With an average of 22 minutes added to each shift, this employee will take home almost $30 per week from time theft. By the end of the year, you will have paid this employee almost $1,500 dollars that they didn't earn.
2. Taking longer breaks than allowed by their shifts
Work breaks can be great for employee morale and can even increase productivity. However, another common form of time theft is taking longer breaks than allowed.
There's no federally mandated minimum break time, but quite a few states have laws on the books for both meal breaks and rest breaks.
You should always follow state and local guidelines regarding break times. And given the benefits, offering breaks to employees during their shifts is probably better for workplace productivity and morale.
However, if you notice employees are starting to extend their breaks for significant periods of time, you might need to find a better way to track employee hours to prevent them from taking advantage.
3. Buddy punching
It wouldn’t be uncommon for an employee to exaggerate hours or go over on their break time once or twice. Buddy punching, though, is a more egregious type of time theft.
Buddy punching is when an employee (a "buddy") clocks in or out for another employee, likely because an employee hasn't arrived at work yet or has skipped out early.
Buddy punching is more likely to happen when you're tracking hours manually (via pen and paper) or when you're using an old-fashioned "punch" time clock. These analog tools are easier to manipulate than most modern time clock software.
4. Misreporting their time spent on a job site or on the road
If you pay employees for travel time between job sites, that’s another area where hours can be misreported. Getting "stuck in traffic" could happen to anyone, after all. And when you can't easily see the status or location of a mobile or off-site employee, verifying their travel time can be difficult.
5. Spending time on personal tasks at work
Spending time on non-work-related tasks is another way employees can steal time from employers.
This could include making personal calls or texting on the job. For computer-bound employees, it could mean paying bills online, and for off-site employees, it could mean running errands between jobs.
Now that many people have smartphones and are conditioned to check them frequently, one report from Udemy.com found that 62% of people surveyed spent at least an hour of the workday looking at their phones.
At the risk of sounding like my dad, that's time they could have (should have) spent working.
6. Getting distracted by the internet
Especially for employees who spend most of their workday looking at a screen, surfing the net can be a huge distraction. Employees who steal time this way can waste hours looking at social media or other non-work-related sites.
Not only does this distraction cost you money, but it also costs you productive time due to the cost of task switching. Every time an employee switches tasks (or switches between a work tool and a personal site online), they lose a little bit of their momentum and focus.
When an employee leaves a site like Facebook, for example, it takes that person’s brain a few minutes to fully return his focus back to his work task.
In a way, this form of time theft hits you twice as an employer: once when employees use the internet for things other than work, and again when their focus has to recalibrate so they can get back to work.
How you can prevent time theft at work
Now that you know how to spot potential instance of time theft in the workplace, let's get to what you really want to know: how to stop it.
Below, we'll talk about ways you can make sure time theft doesn't happen at your business.
Create a workplace that encourages respect and high employee morale
My No. 1 tip for discouraging time theft will always, always be investing in employee morale.
Aside from discouraging time theft, businesses with highly engaged employees report being 21% more profitable than the average business, according to Paycor.com. So, even if the odd employee steals time here and there, your higher profit margins might counteract that behavior.
Additionally, respect and engagement with your employees goes a long way. Employees who feel respected are more likely to respect you as a manager and follow your workplace rules. That includes respect for your rules against time theft.
Use time clock software
Using time clock software is another way to prevent time theft. These types of tools are much more difficult to manipulate than pen-and-paper trackers, Excel time trackers or old-fashioned punch clocks.
With time clock software, you can cut down on misreporting hours by setting rules in the program. You can prevent early clock-ins, for example, or prompt employees to clock back in via mobile apps when their breaks are over.
You can also track off-site employees' locations via GPS or geofencing rules. With these tools, you can restrict clocking in to your job site or see where an employee "stuck in traffic" again is actually spending her time.
While buddy punching is still possible with certain types of time clock software, advanced tools like biometrics or time clocks that require accompanying pictures can make that type of time theft nearly impossible.
Many time-tracking tools can also help with reducing time spent on personal tasks or on distracting websites. Some tools prompt employees to track their time to the minute when working on different tasks. You can also track employee computer activity through screenshots or URL reports.
Pro tip: In addition to preventing time theft, these time clock tools will also give you accurate, up-to-date information on employee productivity, attendance, and labor costs.
Time is money: Prevent time theft
No employee is perfect, and no one can account for every second of their workday. But as an employer, you can put certain measures in place to make accurate time tracking easier for you and your employees.
Time clock software is your best bet for easy, semi-automated time tracking. To find the tool that's right for you, check out our reviews of popular systems.
Below are some of our recommendations for specific time tracking needs:
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool owns shares of and recommends Facebook. The Motley Fool has a disclosure policy.