The do’s and don’ts of time theft: Eradicating the billion-dollar productivity drain

Time theft – when employees are paid for hours they did not work – costs companies $400 billion each year in lost productivity. A recent survey of shift workers from Software Advice found that 43 percent of hourly workers have exaggerated the amount of time they work, with a quarter of respondents doing this 76 to 100 percent of the time. Meanwhile, the American Payroll Association estimates that 75 percent of businesses are affected by time theft – which can add an extra 7 percent to payroll costs.

There are many ways that time theft is conducted within a business – people could enter inaccurate hours worked on timesheets, clock in to shifts early or late, “steal” time by conducting personal activities while working, or conduct “buddy punching” – when a colleague clocks into a shift on behalf of the employee.

That’s not to say that all employees are maliciously working to skirt the system – in many cases, time theft occurs because the processes and systems established to track time are not easy-to-use and intuitive for the employee, or are not configured to the specific needs of the company’s senior executives.

But how can you ensure your business doesn’t fall victim to a productivity and revenue black hole due to time theft? Here are five do’s and don’ts to avoid time theft.

1. Do eliminate manual processes. In an era where cloud and mobile are mainstream, surprisingly there are still many organizations that rely on paper- or Excel-based systems to track time. Businesses often use spreadsheets for ways not intended – leading to data inaccuracy, productivity inefficiencies and financial loss. An automated time and attendance solution can eliminate these challenges while more effectively scaling across a geographically dispersed workforce.

2. Don’t make it easy for “buddy punching” to occur. For shift workers in industries such as retail, construction, manufacturing and many others, traditional time clocks are used for people to punch in and out of shifts. But these hard-wired can be cumbersome to set up and maintain, and cannot adjust to evolving wage and hour regulations. Today, technologies such as Replicon CloudClock can turn any mobile device into a time clock. By downloading the CloudClock app, businesses have a way to immediately start tracking time, with a photo audit capability built-in to eliminate buddy punching.

3. Do provide real-time visibility. A lack of insight into employees’ hours can result in inefficient scheduling, leaving some people on the bench while others are overworked. Companies lose money everyday by not fully utilizing their staff. Make sure that supervisors can easily view and approve timesheets and time off requests and balances, and set schedules that minimize unnecessary overtime payments.

4. Don’t forget about the past. The benefit of an automated time and attendance solution is its ability to access historical data to better forecast for future projects – and know if too much time is being on a particular activity. By giving managers both historical and current data, they can review time worked by their teams. This means managers can take any necessary action if employees seem to be taking too long to work on a task – or are inadvertently “padding” their time.

5. Do have a highly intuitive and flexible system. While most solutions in the market have standard, out-of-the-box timesheet templates, many companies have specific requirements from the system – whether it’s integrating with existing systems, specific time entry codes or other configurations. For example, the US Department of Agriculture needed to integrate its federally mandated payroll system with its time tracking and client billing solution. It’s critical that any timesheet system introduced is centered around the needs of its users.

While every business may not have a rampant time theft issue, chances are there is some degree of time theft taking place – which becomes more acute as companies employ a more diversified workforce. It’s by investing in the right solutions that businesses can reduce this issue and save thousands of dollars each year.