Stemming the Drain Time Theft Sucks From Your Budget
Time theft is a considerable problem that every business must address. While a few minutes here and a few minutes there may not seem like much, the fact is that it adds up over time. When time theft is pervasive across an organization, the cost can easily equal or exceed the cost of hiring a few new employees. Getting a handle on it quickly and stemming the problem is essential for the stability of your business and the income of all your employees.
The Size of the Problem
Around ten years ago, the American Society of Employers estimated that time theft costs companies roughly 20% of every dollar earned. Imagine you are a small business with $1 million in annual sales; 20% of that is $200,000. At this level, it's much easier to see just how much time theft could be costing your organization. That lost revenue is the salary of several employees, bonuses, the new equipment you want to purchase, and the additional marketing materials you want to create. This not only hurts your business, but can also do compound damage to the overall economy.
Addressing Time Theft
Your employee manual should clearly and explicitly spell out what time theft is and prohibited behaviors. The most common forms of time theft you want to include are:
- Buddy Punching
- Starting Late or Finishing Early
- Extended Breaks
- Performing Unauthorized Overtime
- Engaging in Personal Business During Work Hours
- Falsifying Time Sheets & Leave Records
Most of these actions are "innocent" and not done with malicious intent. For instance, starting late but then finishing late isn't an offense. Taking a slightly extended break because of traffic after lunch or due to a medical issue will happen from time to time. These minor forms of time theft can be addressed via conversations and gentle reprimands. If they recur, then it may be necessary to take more formal action.
Conversely, falsifying timesheets and buddy punching are more serious offenses. These deliberately fraudulent activities are grounds for immediate termination. With these forms of time theft, there is no ambiguity or nuance that you need to sort through for the legal justification required to terminate an employee.
Always remember that establishing your time theft policies and the penalties are essential. This information should be clear and direct in your employee manual. Most business owners will include it within the company code of conduct and place it conspicuously in front of HR, punch clocks, break rooms, etc.
Terminating Time Stealers
Whenever an employee engages in time theft, either a long break, engaging in personal business during work hours, etc., it should be documented and placed in their file.
Terminating employment should always be the last resort. It can sap morale and expose you to significant legal liabilities. Thus, it's best to amass thorough documentation, establishing the reasons for the employee's dismissal. This can include photographs, videos, time records, disciplinary records, and more. The more information and evidence in the employee's file, the less opportunity they have to retaliate with a wrongful termination lawsuit.
We encourage you to contact Greenlink Payroll at (480) 385-2525 for more information about the software and strategies we use to stop time theft in its tracks. It's our pleasure to help your business make the most out of every minute of every day.