Workforce time theft is on the rise. Find out how your crews might be stealing time and what you can do about it.
In this blog, we’ll outline different ways workers in construction steal time and submit false timesheets which add up to a huge loss in productivity for the company. Furthermore, we’ll discuss ways to prevent time theft.
What is Time Theft?
Time theft occurs when an employee is paid for work they have not actually done, or for time they were not actually at work.
From manipulating time sheets to using work time for personal time—whenever employees are on the clock but not on the job, they’re stealing time. Employers pay the price via inflated payroll and lost productivity.
Why is Time Theft Important?
Over $400 Billion per year are lost in productivity due to worker time theft according to a report in the Boston Globe and Denver Post. 10 minutes here and 20 minutes there add up to big losses over time. Do you have this problem? If you have employees, then you likely are experiencing some level of time theft. In one study by Intuit, 49% of employees admitted to committing time theft. The costs for this can be harmful to a small business over time since the average amount of time stolen each pay period is 4.5 hours per employee (per a Robert Half International study). Do the math below to see how much your company may be losing.
How to Calculate Time Theft
Let’s be conservative and use an average time theft loss of 4 hrs per week/employee for this calculation.
4 lost hours per week is 16 hours per month or 2 days.2 days per month is 24 days per year which is almost 5 weeks lost per year per employee
To quickly calculate the cost for you multiply 5 (weeks) X your weekly payroll = you losses in time theft.
5 x ________________(weekly payroll) = $ ______________ lost productivity due to time theft
5 Real Examples of Time Theft
- Rounding up and down on the paper timesheet
Workers that show up 10 minutes late or leave 15 minutes early will typically round up or down in their benefit. Using a paper timesheet makes this process easier for the worker to take advantage of not having a way to track actual time on site working.
- Buddy punching
This occurs when a friend clocks in or signs in for another worker who is running late.
- Personal errands
In construction, our workers are sometimes required to go get materials or tools. This freedom can be abused when workers make personal stops for a snack or Starbucks or other non work related items.
- Long breaks and lunches
Most companies have a standard break time (commonly 30 minutes). When workers spend 40 or 50 minutes on a meal break, that essentially is stealing an extra 10 or 20 minutes assuming they stop work as scheduled.
- “Horsing Around”
With smartphones and other temptations throughout the day, workers can be found distracted with excessive phone calls, too much socializing or watching sports on their phone.
A Real World Story
A few years ago I hired my favorite plumbing contractor to do some work on my home. The plumbing crew of two clocked in at 7am at the shop. They were supposed to arrive at the job at 8am to start work. Before they arrived, they stopped to get a morning snack. This caused them to arrive at 8:45am. Once they arrived, they sat in the van and enjoyed their snack for 20 more minutes before getting out. They quickly determined that they needed some materials (which could have been determined the previous day). They spent about 30 minutes making a list of materials they need to get. They both then drove to the supply store which was 20 minutes away. Rounding up materials took another hour and they returned to the job site at 11am. They realized that they forgot a bag of materials at the supply store. They BOTH got back in the van and drove to the supply store. It was 12:15 when they returned. It was lunch time so they left to the local store and took a 50 minute lunch break. I estimate that they were able to complete about 2 hours of work that day. After witnessing this first hand, I wondered how many times per week they pull this stunt. As an owner of a construction company myself, I was blown away by this blatant time theft.
What can be done to reduce or eliminate Time Theft
Establish standards and expectationsThe first step in getting control over time theft is making it clear to everyone in the company what is acceptable and and what is not. This can be done by having a meeting on the topic but a better more enforceable way is to establish a written employee handbook. In the handbook, rules for taking lunch breaks or how to report time is outlined so that everyone is clear. Make sure each employee not only reads and understands the handbook but also signs it so you can file it away. If you ever find yourself having to enforce rules or correct bad behavior, a signed handbook will be helpful.
Check out our free Employee Handbook Template made specifically for the construction industry.
Time TrackingUsing a reliable system to track time with GPS locations will provide the information and accountability for accurate time cards. Paper timesheets allow for time theft in many cases since there is little to no validation of the hours worked.
Instead, try using a phone based time tracking system like BuildCenter. The Free Trial will allow you to see how easily accurate time tracking can be achieved.
4A Timesheet FrameworkTime theft is a real problem that most companies simply ignore or pretend doesn’t exist. If you are ready to reduce or eliminate time theft, check our our free guide that dives deeper into how to create “The Perfect Timesheet” using the 4A Timesheet Framework.
Click here to get the free guide
Summary
Time theft is a problem that is costing companies billions of dollars every year. There are ways to control it and it can boost a company’s productivity substantially. Starting with expectations and documenting it with an employee handbook, combined with a time tracking tool like BuildCenter, wage theft can be drastically reduced.
Resources
- Check out our free Employee Handbook Template made specifically for the construction industry.
- Start the Free Trial of BuildCenter to start tracking time with GPS
- Review the A4 Timesheet Framework: A Free Guide. Click here to get the free guide
