How to reduce time theft and keep accurate employee time records

It's not OK for staff to help themselves to cash from the till, or to abuse your expenses policy for their own gains.

Yet at many businesses, a different type of 'theft' occurs on a daily basis.

It's called time theft. You might also know it as timesheet fraud.

And, while it might not seem all that big a deal on the surface, when it starts to add up, it can have a crippling effect on your business.

Join us as we investigate the impact of this practice, and discuss the best ways to tackle it.

The Problem

If you've ever worked in a role that required you to fill out a timesheet, there's a good chance that you fudged the numbers to give yourself a few minutes' extra pay here and there.

Guess what? Your current employees are probably doing the same.

This type of 'timesheet fraud' or 'time theft'  is very common in systems where employees self-report their hours — so much so that you probably factor these extra costs into your budget.

For some businesses, time theft issues may go further.

Even with a digital system, staff might clock in their colleagues if they're running late — this practice is somewhat affectionately called 'buddy punching'.

Staff might also take long breaks without recording them accurately on the timesheet, or even leave work completely for hours at a time, and turn up later just to clock out.

How much is timesheet fraud costing my business?

It's not clear how much time gets 'stolen' by the average employee every day, week, or year. One study that's cited across the internet claims 4.5 hours per week is the figure, but we couldn't find any trace of the study during our research. Given that this data is most likely self-reported, it probably isn't accurate!

Instead, let's create a very rough estimate for a business with (mostly) honest employees who round up their hours a little each day.

For example, Adam gets to work and clocks in at 8.55, but he spends some time chatting to his colleagues and isn't ready to work until 8.59. At the end of the day, he clocks out at 17.20, but hasn't really done any work since 17.10.

That's 14 minutes of unproductive time each day. Multiply that across five shifts a week, and it's 70 minutes a week, or about 42 hours a year. If Adam gets paid £10 per hour, then you're paying him an additional £420 a year for doing no work whatsoever.

Multiply this by the number of employees you have, and you'll soon realise that even this seemingly insignificant level of time theft can be costly.

What if employees seem to be taking advantage of the timesheet system?

An extra five minutes here and there may not be malicious, but on some occasions you may have reason to believe that some staff are deliberately padding their timesheets by a significant amount on a regular basis, and perhaps teaming up with colleagues to get their stories straight.

At this stage, this is as much a disciplinary issue as a problem with your processes. While new processes can prevent staff from taking advantage of the company in this way, they won't change the mindset of the culpable employees. Instead, their disengagement will manifest in other ways.  

Are there any other problems with inaccurate timesheets?

If you're not too worried about the monetary costs involved in inaccurate timesheets, there are still other issues that could arise from errors in timesheets.

Firstly, keeping accurate records of time worked by each employee and role can be extremely helpful for project management and future labour planning, as well as budgeting.

Secondly, accurate timesheets are important when it comes to complying with various employment regulations — and if you need to investigate any incidents, it's important that you know for sure who was working at the time.

You also need to check that staff aren't exceeding the hours set out in the European Working Time Directive (unless they've opted out, of course).

The Solution

The solution will depend on your problem.

Are you trying to minimise mistakes, or stop employees from taking advantage of your current system?

Whatever the issues you're facing, it'll probably require several new policies or tools to fix them.

Policies

1. Get tougher on timesheet submission. If employees have to manually submit timesheets, set a stricter deadline on when they need to be submitted. This will encourage employees to record times promptly, instead of generously guessing their working hours from multiple days gone by.
2. Review rota plans (and workload). Sometimes, employees may ask a colleague to clock in on their behalf and come into work later, because there won't be any work to do until later. If this is the case at your business, speak to your staff and review your rota templates. Move shifts around so that there's less coverage at the start of the day, or whenever it's quieter. For example, if two staff do 9-5, shorten one of the shifts to 10-5 or push it to 10-6.
3. Allow more flexible working. Staff may lie on their timesheet to hide tardiness caused by transport problems or other unavoidable issues. If you want them to be more honest, allowing flexibility in terms of start and finish times is wise. This will require a cultural change as well as a policy change — make sure all managers are onboard.

Tech

1. Switch to digital time clocking. Even a simple PIN or swipe card system is more difficult to game than a paper timesheet. Times are automatically recorded when the employee clocks in at a terminal or their workstation — so timesheets are accurate down to the minute.
2. Implement photo-taking at clock-in. If you find that employees are using each others' cards or PINs to clock each other in and out, you can implement terminals that take a photo of the employee when they clock in and out. This adds another layer of security the clocking in process and completely eliminates 'buddy punching' so long as you check the photos.
3. Implement mobile clock-ins. Some time and attendance software allows for staff to clock in and out through their mobile phones. Clock ins can be restricted by location, so that you know your staff are on-site — no clocking in while staff are still in bed or on the bus!
4. Implement biometric clocking-in. If employees are still exploiting your system, be even tougher by requiring fingerprint or iris scans on clock in. This will require specialist hardware, however, and you'll need to look into data protection rules because biometric data has extra protections under the GDPR.

The Critical Point

Whatever solution(s) you adopt, they won't work out if you don't have buy-in from all your senior staff. To gain this, everyone needs an understanding of the current problems and how the fixes aim to resolve them.

Without this agreement across the board, it only takes one senior manager to cause the new system to fall apart. They might tell their staff not to use your new clocking in terminal, or continue to be relaxed about timesheet submission. If you can't rely on your new policies or tech being applied consistently, you might as well not use them at all.

Final Thoughts

Time theft is not an insignificant issue for small businesses, but technology and a couple of small tweaks to company policy can combine to significantly reduce its cost to you.

One potential solution is RotaCloud's Time and Attendance add-on. With automated timesheets, mobile clock-ins and attendance alerts, our app gives you all the tools you need to track time worked against scheduled shifts.

Want to find out more about Time and Attendance? Click through to rotacloud.com to see it in action.