Time Clock Fraud Affects Employee Morale

Buddy punching—when one worker clocks in or out for another—seems harmless enough, right? Let’s say that someone needs to leave work early. He asks one of his coworkers to clock out for him when her shift is over. She agrees, and tells him not to worry. In fact, she’s happy to help out, and figures he’d do the same for her.

Even if it’s no big deal for your employees, buddy punching can have a negative effect on others.

Businesses lose money all of the time because of employee time theft. Buddy punching is one of the most common issues, but there are other ways that time theft occurs.

For instance, when a worker does any of the following, you can consider it to be time theft:

• Inaccurately reports their clock-in/clock-out times.
• Takes care of personal business on work time.
• Stays on a break longer than scheduled.
• Cuts out a little early, or comes back late after lunch.

Is time clock fraud an issue for your company?

According to estimates, time theft can cost 5% or more of a business’ gross profit. If you’re grossing $1 million, that’s $50,000 dollars out the window that you could be putting toward raises, hiring, employee benefits, or another facet of your company.

Time theft also affects your workers.

When employees steal time, other workers can get frustrated, especially if they feel like they’ve been left hanging. It doesn’t matter if they’re sneaking out of work early, extending their breaks, or taking care of personal issues while they’re on the clock.

This type of behavior can send negative ripples through your workplace culture:

• When leaving early becomes a habit, a person’s work can pile up, or go unfinished.
• Someone else might have to cover to make sure another employee’s work gets done. This can create unwanted bottlenecks in workflow, or even cause employee burnout.
• Other workers might be upset, and decide to go take the issue to management. This can put them in a tough situation. Do they betray their coworker?
• Managers might lose faith in all of their employees, even if just a few are taking advantage of the time clock. They might decide to reprimand entire team, or set drastic new policies that make everyone feel like they’re being watched.

There’s no such thing as harmless fraud.

Time theft can affect your work environment in ways you’d probably rather avoid. It might even cause certain employees to start looking for new jobs. Here are a few key steps you can take to stay ahead of time theft before it causes issues for your company:

1. Discuss time theft with your employees
   It’s possible that some employees don’t know that time theft is an issue. They might even know that they’re committing time theft by leaving early.When you take time to communicate with them, you can help them understand the effects that their actions have on your business and coworkers. There are several effective ways to approach this.

• • HR can lead the communication process, and managers can meet with workgroups separately.
  • Senior leaders can also be involved as part of a company-wide communications effort.
  • You can use your employee newsletter, short videos, email memos, or other communications tools to reinforce messages around time clock fraud.

2. Update your time tracking policy
   Now might be a good time to update your company’s time tracking policy, or create one. Here are a few suggestions for what to include in establishing or updating your policy

• • Your time tracking guidelines explaining how employees should track their time.
  • Information about buddy punching, and how employees might be hurting the company when they punch in or out for a coworker or inaccurately report their time.
  • Explain what workers should do when they need to clock out early, are late, or have to extend their break time. Be sure to spell out the consequences if workers don’t follow the policy, or get caught trying to steal time.

3. Consider upgrading your time and attendance technology
   Is your business still tracking time on paper? Or, are you using a system that requires manual entry? You might be making it easy for employees to commit time theft. Now might be a good time to explore ways to upgrade your time and attendance solution. This includes time clocks that give companies options that help eliminate time clock fraud, such as those from Icon Time.Icon Time’s solutions offer a number of innovative features that bring big tech to small businesses, including:

• • RFID proximity card and fingerprint biometric clocks.
  • Built-in time and attendance software you can manage from a web browser.
  • Customizablephoto backup for when an employee’s fingerprint is difficult to read.
  • Third-party badge reader compatibility.These extra employee verification steps help put next-gen technology to work for you. And with Icon Time, these turnkey solutions are ready right out of the box, and require no monthly fees, service agreements, or extra software to install.Time clock fraud might seem like a harmless offense to some employees. But it can create a difficult situation for your business. And, it can cause stress for your entire workforce. Communicate with your employees, and look for ways to update the way you track time and attendance.