The top form of theft victimizing business owners throughout the United States is time theft.
I don’t mean people wasting your valuable personal time, although that probably happens to you quite often.
Time theft occurs when employees start shifts late; leave shifts early; take breaks that are longer than scheduled; commit outright timesheet fraud; work overtime that wasn’t authorized; engage in personal or otherwise non-work-related activities while they’re supposed to be doing their jobs; or engage in buddy punching.
Every form of theft listed above costs business owners in every industry. But one form of theft listed above is sneakily stealing from most business owners.
According to a study conducted by the American Payroll Association, a staggering 75 percent of businesses in the United States are falling prey to buddy punching. No, this isn’t when friends start throwing hands. Buddy punching is one employee clocking in for another, perhaps because they’re late for their shift or coming back from a break.
TSheets, a time-tracking platform by QuickBooks, used Bureau of Labor Statistics and PollFish data to calculate the cost of buddy punching to American businesses. The number they landed on is a massive $373 million.
Deputy, an automated staff scheduling and attendance and time management platform, conducted a worldwide study to find out just how much time theft is costing businesses. According to Deputy’s findings, the average employees steals about 4.5 hours per week. That works out to almost six weeks of work per year of time theft per employee.
Business owners may be paying employees for nearly six weeks’ worth of work they’re not performing. Let’s look at a few solutions for preventing buddy punching.
Explain that Buddy Punching is the Same as Stealing
What does your employee onboarding plan look like? If you just said or thought, “I don’t have one,” please click here to learn why you need a plan for onboarding new employees.
Your new hire orientation should include clearly stated policies and procedures. Present new employees with a handbook (Toast POS says only 68 percent of restaurants have one) that outlines and defines what’s expected of them, including time theft consequences. Explain in person and in the handbook that clocking in for others is theft and will be treated as such.
Operators must determine what consequences work best for them. After all, immediate termination can leave a bar or restaurant struggling for weeks. Whatever the consequence for buddy punching, it must be executed consistently and swiftly.
When a new hire has completed reading the employee handbook, ask if they have any questions about policies or anything else contained within it. If they have questions, answer them, then make sure they understand the policies and procedures fully.
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At the end of onboarding, present them with a document that states they understand your policies and the consequences for violating rules. Have them sign and date it and keep the document in a safe place.
Managers can Make or Break Your Business
Technology has developed to the point that it’s relatively inexpensive and can manage just about every aspect of our lives. But the promise of convenience, cost-cutting benefits, and time savings carries with it an inherent downside.
Owners and operators need to avoid falling into a technology trap, believing automating everything with solve all their problems. I’m going to touch on tech-driven ways to combat buddy punching below, but before I do, know that technology is there to assist managers, not do their jobs for them.
Manager responsibilities include tracking employee attendance and breaks, and reconciling punches at the end of pay periods. They should know when each employee is scheduled to start and end their shifts. A manager needs to know when an employee has started their break and when they need to return, ready to work.
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Michael Tipps of Invictus Hospitality says there’s no tech-based replacement for an attentive manager or assistant manager. If knowing where everyone needs to be and when they need to be there is too much for a member of your management team, they’re not ready for the role and responsibility.
Some time clocks are equipped for geofencing and GPS tracking. They come with an accompanying app and utilize WiFi, cellular data, and GPS data to prevent buddy punches.
This type of solution allows operators to install a “fence” around their business. An app downloaded and installed on employees’ mobile devices uses data to know when they’re within the geofence. If an employee isn’t within the predetermined area, they’re unable to punch in for work, keeping them from engaging in fraudulent clock-ins.
There are some people who won’t be bothered by this solution. However, you may limit recruitment efforts if you implement clock-in tech that tracks the movements of your employees. Some people will find this to be an invasion of privacy, and others may believe they’ve taken a job from someone who doesn’t trust their employees. Morale and employee retention suffer in businesses that develop an atmosphere of suspicion.
Biometric Time Clocks
This may be the most extreme of all buddy punch solutions. This type of time clock leverages biometrics to prevent employees from clocking in for one another or otherwise creating fraudulent clock-ins.
Such time clocks can read fingerprints, handprints, and even retinas for clock-ins. Some use facial recognition for clocking in employees. Currently, this is about the most undefeatable clock-in tech on the market.
It’s also the kind of thing we expect we’d find in high-security government installations or spy movies.
If some employees would have a problem with geofencing, they’d probably have zero interest in giving up their biometric data just to clock in for their shift behind the bar, serving the dining room, or prepping food in the kitchen. Then again, millions of people have no problem locking and unlocking their phones with their fingerprints, thumbprints or faces.
All this said, owners and operators need to address their role in time theft. Nobody wants to feel like they work in a surveillance or police state. People don’t like being micromanaged, and they don’t perform their best for employers who make them feel as though they’ll never be trusted no matter how hard they work to prove their trustworthiness.
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Mistakes are made—we’re none of us perfect. But knowingly failing to pay employees the correct wages they’ve earned for all the hours they’ve worked is illegal and reprehensible. The same is true of failing to pay employees at all for their work. It’s easy to become paranoid about employee theft; discovering theft from employees isn’t a green light to steal from them.
Statistics show that business owners will likely never fully eradicate employee theft. The best strategy is to address what constitutes theft, explain the consequences, execute the consequences consistently, and employ a vigilant management team. Building a culture of trust and buy-in that motivates employees to combat theft from coworkers can only make that strategy stronger.