Most businesses have a number of employee tracking policies in place to prevent workplace theft. Maybe two employees are required to make bank deposits or a manager must always be present when closing registers. What many small business owners may fail to safeguard against, however, is time theft.
If you’re not careful, your employees may be engaging in an act of time theft otherwise known as “buddy punching”.
Here’s what you need to know about buddy punching and how you can prevent it from costing your small business.
How it Works
Every employee has found themselves in this position at least once in their career: you’re driving home from a hard day’s work only to realize that you’ve forgotten to clock out! The simple solution is to break the rules just a bit and to call a friend who is still working and ask them to clock out for you.
While this act may seem harmless, it’s a slippery slope that can lead to a much more questionable practice of buddy punching.
In its more insidious form, buddy punching occurs when an employee is running late or even absent from work and asks another employee to clock in for them.
In the employee’s eyes, this might seem like an inconsequential act. After all, those few moments save them the headache of being written up and the time itself probably doesn’t have that much effect on the daily operations of your business.
What they do not realize, however, is that dishonest employee time tracking can be detrimental to small businesses. For example, consider this scenario presented by Deputy.com:
“Let’s assume you pay your staff on average $25 an hour:
If each employee ‘steals’ 5 minutes when they clock in and 5 more at the end of their shift it is a total of 10 minutes per shift . . . Assume you have 3 employees on per shift.
That is the equivalent of 30 minutes per shift.
Over a 52 week year, this is the equivalent of 26 hours per year of stolen time per shift – Using the average wage you pay them, this is equivalent to $1000 per shift – The question for you is how many shifts do you have a day, or how many employees do you have? If you have 2 distinct shift cycles per day or 5 employees, the costs rise significantly.”
Like any type of time theft, buddy punching begins as a seemingly harmless way to cut corners, but it can result in serious financial losses for your business (not to mention loss of productive time). Furthermore, buddy punching is doubly complicated because it involves the dishonesty of multiple employees and requires more discipline on the employer’s end.
How to Prevent It
As detrimental as buddy punching can be, it can be prevented by adding a few of the following measures to your employee time tracking.
Sophisticated Time Tracking
Most time tracking systems are incredibly vague – they measure when an employee shows up and when they leave.
By adopting more sophisticated time tracking metrics (such as those measured using iSolved), an employer’s knowledge of their employees’ time is not limited to a number of hours. Rather, employers can now gain insight into how those hours are spent.
When employees are aware that the details of their work time are being monitored, they are much more accountable for the time they report.
Biometric Time Clocks
Basic employee time tracking software such as a keypad or badge scanner leaves your business vulnerable to the negative impact of buddy punching.
By switching to a biometric employee time tracking system, employees must use their unique fingerprint to clock in, which makes buddy punching virtually impossible.
Check out this article to learn more about how biometric time clocks could improve your small business.
Buddy punching is a huge threat to any small business. Not only is it costly, but it can happen right under the nose of even the most savvy employer. To safeguard against this insidious practice, contact the payroll experts at Commonwealth Payroll & HR to learn more about how you can protect your small business. Call us today at (978) 599-1500.