An Essential Guide to Curbing Employee Time Theft

employee time theft

Whether it’s extended breaks, taking excessive personal timeouts, or using technology for non-work purposes, time thefts can prove to be expensive for your business.

Check out these time-theft statistics to understand how even a few minutes can put a dent in your bottom-line.

  1. According to the American Society of Employers, 20 percent of every dollar earned is lost to employee time theft in the U.S.
  1. Robert Half International’s study revealed that an average employee steals about 4.5 hours each week from their employer. This amounts to six full work weeks annually, costing businesses billions.

Thus, time theft can seriously ruin your business profits. This detailed guide aims at covering the following sections:

  • What is time theft?
  • Eye-opening statistics on how time theft impacts business profits
  • How Employees Steal Time OR What is considered time theft?
  • How it impacts business productivity and bottom line
  • Strategies to effectively tackle time theft

What is Time Theft?

Time theft occurs when employees accept pay for the time they haven’t worked. Time theft doesn’t always have to be deliberate and malicious. It can also happen by accident or due to negligence.

Time theft can result from activities as menial as arriving late or leaving early. It may even result from your employees’ malicious actions, such as deliberately running errands during work hours.

Time theft can lead to losses in time and money for companies. The time and money lost due to time theft can significantly hinder the progress of your company. And thus, time theft is not something that should be ignored or taken lightly.

Every minute of time theft counts, and you should actively take steps to reduce your company’s occurrence of time theft.

Eye-Opening Statistics on How Time Theft Can Impact Your Business Profits

Are you still confused about why time theft should be a big deal and why should you direct your resources towards curbing it? Then here are some eye-opening statistics on time theft:

  1. Time theft causes U.S. employers more than $400 billion per year lost in productivity.
  2. In a survey done in 2015, 43% of employees admitted to deliberately committing time theft. And, 25% of employees admitted to reporting more hours than they actually worked 75% to 100% of the time!
  3. A survey on accountants revealed that more than 92% of their clients experienced a time theft problem.
  4. In the United States, the practice of buddy punching costs employers $373 million in a year.
employee time theft chart

How Employees Steal Time or What is Considered as Time Theft?

Now you know how prevalent time theft is and how much of a significant impact it can have on your company’s growth. If you are wondering what exactly is considered as time theft, then here’s a list explaining just that:

1. Extended Breaks

Having extended lunch breaks is one of the most common factors that contribute to time theft. It is easy to lose track of time during lunch and coffee breaks.

Suppose your employees leave for their break 5 mins early, and they come back 5 mins late for three breaks in a day. This contributes to a time theft of 30 mins per employee per day.

This might not seem much. But when compounded over time, this will come up to 2.5 hours of work time per employee per week, and more than 10 hours of work time lost in a month.

2. Buddy Punching

Buddy punching is when an employee asks other employees to punch in for them. This means your employees are coming in late or ghosting, but this lost time is not accounted for officially.

Buddy punching or ghosting, again, is a common form of employee time theft. And, this can result in significant losses for your business’ productivity and resources.

4. Finishing Early or Arriving Late

If you do not have a strict employee schedule to follow or a punching system, this form of time theft might be common at your workplace. Your employees are probably arriving late and leaving early at work while filling in the same amount of time in their timesheets.

5. Unauthorized Personal Time

Employees also tend to spend excessive time attending to personal tasks and matters, more than you’d guess.

Of course, some personal time is required to be taken during working hours. That is not a problem. The problem occurs when your employees start spending excessive, unauthorized time on personal tasks.

This includes spending excessive time on activities such as attending personal calls, sending personal messages and emails, doing tasks such as paying bills and shopping or managing their business activities during your work hours. This can also lead to a considerable amount of time theft.

6. Extended Socializing During Work Time

Socializing amongst employees and cracking a few jokes here and there is a good thing. Socializing can help your employees be more productive. But the problem arises with excessive socializing.

When employees socialize in groups for extended periods, like 30 mins or even an hour, that contributes to time theft. Socializing in groups is much worse as it contributes to huge time and monetary losses for the company.

7. Unauthorized Internet Usage

The Internet is one of the most tempting worlds to get lost into. With the whole world of entertainment and social media just a few clicks away on mobile devices, your employees can spend hours browsing the Internet on non-work related things.

Unauthorized or non-work-related internet usage can either happen from personal devices or office laptops and desktops. This can contribute to a significant amount of time theft for your company, and hence it is essential to be looked into.

8. Genuine Mistakes

As mentioned above, time theft does not necessarily occur intentionally. Sometimes, your employees may forget to clock in or clock out in your employee tracking system, or there might be some manual discrepancy in the system.

All these mistakes can lead to time unaccounted for and thus contributing to time theft in your company.

9. Misuse of Paid Leaves

Misusing paid leaves by using it for personal reasons against the company policies also counts as time theft. This includes instances where your employees call in sick and misuse their paid sick leaves for personal recreational reasons.

How Time Theft Impacts Business Productivity and Bottom Line

time theft impact

Even smaller chunks of time theft ranging from 10 to 15 minutes here and there contribute to a significant loss of productivity to businesses.

Time theft may seem insignificant. Policing your employees over it and focusing on curbing time theft may seem like a petty and menial task.

You should understand that over time, time theft amongst employees can become normalized to an extent where employees may not feel that stealing work time is unethical and wrong.

The ill-effects of time theft are significantly more when you have a large workforce with multiple employees engaging in time theft, intentionally or unintentionally.

Apart from decreased productivity and increased monetary losses for your company, time theft can also lead to bad customer service resulting in a bad reputation. This happens especially when customer-facing employees contribute to time theft.

Hence, time theft is something that needs your attention.

Strategies You can Use to Tackle Employee Time Theft Effectively

Tackling time theft by implementing specific strategies can help you save hours of employee time each month. This can make a world of difference to your company’s productivity and growth.

In this section, let’s look at some actionable strategies to tackle time theft that you can start implementing right away:

1. Talk to Your Employees and Educate Them About Time Theft and Its Consequences

The important thing to understand here is that your employees probably are unaware of the concept of time theft and its consequences on your company.

Just like you are educating yourself about time theft and its impact on your company’s growth, it is your responsibility to let your employees know about the same.

This is essential because even though employees might intentionally engage in time theft, they might be unaware of the profound impact it can have.

Therefore, proactively educate your employees about time theft, what it means, and its business impacts. The ideal expectation should be that your employees must distinguish between what is considered time theft and what is not.

To make your point more effective, you can share stats from other resources. You can also come up with your stats through an approximate estimate on how time theft has been affecting your business growth over the past few years. You should let your employees know how much each hour of time theft costs for your organization.

2. Develop Clear Policies and Set Expectations

Apart from educating your employees, you can go one step further and develop time theft policies for your company. This will make the deal official, resulting in a vast difference in your employees’ perspective towards time theft.

discussing policies with employees

You must include what counts as time theft and what doesn’t count as time theft. The most important part is that you must also mention the consequences your employees will face if they fail to adhere to your time theft policies.

Setting such time theft might seem a little too extreme for many, but taking this step is essential for your organization’s accelerated growth.

Once the policy is created, ensure that you let your employees know about it. Send out emails and hold live sessions to let them know about your time theft policy. Ensure that it is also included as a part of your onboarding process of new employees.

3. Set up Employee Tracking Systems

Technology can solve any problem. The same goes for tackling employee time theft as well. If you are using manual systems to track your employees’ time, it is time to move to employee tracking tools.

An employee scheduling system can save your day by helping you keep track of employees’ schedules efficiently. Through employee tracking software, you can ensure that your employees don’t resort to unrelated off-work activities.

That said, your employees can also fool employee tracking systems. But the probability of that being done will be significantly lowered than otherwise.

Even if time theft happens in your organization, such employee tracking tools can help you track customer data and find the root cause. Hence, these resources do not just help you tackle employee time theft, but they also help you address most of the occurrences of time theft issues.

4. Set Realistic Expectations

If you want your employees to adhere to your time theft policy, it is essential to set realistic expectations. Setting a time theft policy doesn’t give you the privilege of going overboard with stringent, unrealistic rules.

setting expectations

This might end up backfiring instead of proving to be productive to your company. You might even find reduced employee retention rates because of setting unrealistic expectations.

For instance, having 20-minute lunch breaks might not seem like a reasonable time for your employees. If you add this to your policy, you might end up with many frustrated employees who no longer feel motivated to work. Hence, be careful while setting time theft expectations.

5. Follow Through on Disciplinary Measures

As mentioned in the previous steps, it is better to develop a customized time theft policy for your organization. You should also be adding the consequences of committing time theft.

Though putting up a time theft policy is important, you must also follow through on the disciplinary actions that you have mentioned in your policy.

For example, suppose that your policy states a pay-cut of one day if any employee is found engaging in buddy punching. If you find any employee engaging in this activity, you should ensure that you cut one day’s pay from their salary.

This way, your employees will take your time theft policy much more seriously. This will help you lower your company’s time theft to a significant extent, resulting in overall growth in your productivity.

6. Be Empathetic and Understanding

Lastly, be empathetic towards your employees. Understand that they are humans too, and we all end up making mistakes sometimes. You shouldn’t be invading their privacy and disciplining them for every single action they take.

Remember to monitor your employees and not intrude. Over time, if you find some employees repeatedly engaging in time theft, you can then talk to them. Do not call out employees who come 5 minutes late from their lunch break on a single day.

Key Takeaways

We can summarize this guide by saying that time theft can have significant negative consequences on your company’s growth.

Not only can it contribute to reduced employee productivity and slower growth, but it can also result in a bad reputation for your company.

So, ensure that you start addressing employee time theft starting now. Put up policies and time tracking systems in place. Educate your employees on all your time theft policies and take disciplinary action against those who violate your guidelines. Take help from this comprehensive guide to coping with time theft in your organization. Over time you’ll find an accelerated growth in your company’s productivity.

About The Author:

Gaurav Belani

Gaurav Belani is a senior SEO and content marketing analyst at Growfusely, a content marketing agency that specialises in content and data-driven SEO. With more than seven years of experience in digital marketing, his articles have been featured on popular online publications related to EdTech, Business, Startups, and many more.

 
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