While the occasional late lunch or early clock out may not seem to break the company's financial department, rampant abuse of the system can cause a major blow to a company's bottom line. Businesses who don't actively work to curb time theft abuses stand to lose significant capital. Consider these employee time theft statistics to find out how turning a blind eye to employee time abuses is harming your business.
Buddy punching may not seem like a hot button issue but a whopping 19 percent of employees admit to buddy punching for a co-worker. That's one out of five employees admitting to clocking a coworker in or out. According to Nucleus Research, this innocuous sounding form of theft accounts for 2.2 percent of gross payroll losses. Many businesses are turning to biometric time keeping to negate these abuses but even basic employee identification badges can dissuade employees from abusing the time system. Not only is buddy punching immoral, it also drains company finances.
Just a Little Late…
When looking at employee time theft statistics, many employers worry about the big grievances. Buddy punching, abuse of sick days and vacation time, and outright abuse of company time through loafing may be the most obvious examples of employee time theft but these are only caused by a small fraction of employees. More often, employees are only slightly abusing the system. They clock out at 4:55 every day or spend an extra ten minutes at lunch. While that may not seem like an issue on occasion, it creates a lax company culture that encourages these abuses and they add up to big money.
According to the American Payroll Association, employers lose 4.5 hours per week per employee in time theft. For a single worker making $10 an hour, that adds up to $2,340 a year of lost time and company money. For a small business, this loss can be critical but even for large companies, the cumulative effect of this time theft can be felt acutely. Automated time systems and a strong message of compliance from management can curb these tiny abuses that add up to serious deficits to businesses.
Time off, in the form of a PTO pool, sick time, and vacation time, is a company benefit that increases employee morale and is a major attraction during the hiring process. When it's used appropriately, employers benefit from refreshed and well-rested employees. When it's abused, PTO can cause big headaches for companies in the form of additional staffing costs, slowed production, and decreased morale. A white paper published by Circadian Technologies estimated that unplanned absenteeism cost businesses up to $3,600 per year per hourly employee and $2,650 per year per salary employee.
According to a study from CareerBuilder, 28 percent of employees who were surveyed admitted to calling in sick when they were fine. Those unplanned absences have negative impact on businesses' bottom lines. Businesses can fight back by requiring sick notes and implementing stricter "call-in" policies.
Many employee time theft statistics seem overly grand to be felt in a small to medium sized company but they boil down to a spectacular cost. By clocking out a few minutes early and spending some time on the Internet each workday, employees waste $5,000 in productivity. In a company of less than twenty employees, this amounts to nearly $100,000 in lost funds before the fiscal year even begins. Don't let time theft bury your business. Manage theft through stricter policies and automation.