Survey Review: 43% of Employees Commit Time Theft

Our friends at Software Advice,  a company that provides listings and reviews of payroll software systems, just released a new study exposing how many hourly workers engage in time theft. What is time theft defined as? According to Software Advice time theft is when employees accept pay for time they have not actually worked. Over a year’s time this costs companies $400 billion annually in lost productivity. 

The study revealed three key findings:

• Forty-three percent of hourly workers surveyed admitted to exaggerating the amount of time they worked during their shifts.
• Twenty-five percent of those surveyed say they reported more hours than they actually worked 76 to 100 percent of the time.
• Time and attendance software that uses biometric clocks appears to be the most effective method for preventing time theft: Only three percent of employees report “stealing” time this way. 

The American Payroll Association (APA) reports that roughly 75 percent of U.S. businesses are affected by time theft.  This refers to employees either clocking in early, clocking out late, or having a colleague punch in for them. The APA reports that time theft can cost companies up to seven percent of their gross annual payroll. 

The Time Theft Issue

Almost half of those surveyed (43 percent) admitted to inflating their hours worked at least once. The 43 percent represents those who punch in a few minutes early, or stay a few minutes late as well. Having a proper time and attendance software in place can greatly reduce the cost of time theft by setting rules to the attendance program. For example if an employee tries to punch in ten minutes early the clock can have specific rounding rules to prevent the employee from being paid for hours not scheduled. 

Common Methods of Time Theft

The survey looked at the method employees are using to abuse their scheduled time worked. 

1. Recording inaccurate times was the most popular method of time theft with 45 percent of time thieves using it.
2. Another 43 percent use work time to engage in personal activities.
3. 42 percent of time thieves take frequent breaks
4. Lastly, 23 percent of those surveyed engage in buddy punching (punching in for colleagues).

The use of time and attendance software can help to combat many of these issues such as recording inaccurate times, taking frequent breaks, and buddy punching. Implementing a biometric face reader or finger reader eliminates buddy punching altogether because it requires the employees face or finger to clock in. It also ensures accurate times are being recorded by recording it electronically. Lastly, you can mandate employees to punch out for breaks. This is something that may be a little harder to manage, but can be done with close monitoring. 

The Use of Biometric Clocks

Clearly time theft is a problem for U.S. businesses, so how can we reduce this issue?  The best way to prevent time theft is to implement biometric clocks. By doing so you are requiring the employee to actually be present for their punch to count. Biometric clocks can either use an employees finger, or their face to punch in. 

The report digs deeper into this showing that only three percent of those surveyed are able to commit time theft while using a biometric time clock. Other time and attendance methods such as punch cards, pin punch in software, or those that require a badge are much more susceptible to time-theft than biometric time clocks.  

If you’re interested in learning more about how biometric time clocks can help your business please contact us for more information. 

You can read the entire Software Advice study here.