What Is Buddy Punching?
Buddy punching, time theft or time sheet fraud refers to situations where workers input pin codes or swipe cards to clock in or out on behalf of their colleagues; avoiding managers noticing late arrivals, early departures or general absences.
This results in employees being paid for work they have not done, costing UK companies thousands of pounds in lost productivity every year.
Buddy punching is nothing new – workers have been doing this for decades and that’s because they have been able to – as manual, outdated systems such as punch cards and paper-based systems have facilitated this.
In 2021, there are still numerous industries that use paper-based systems to record their hours.
Not only do manual, paper based clocking-in systems allow for payroll fraud, they also reduce employee productivity and efficiency as it takes time for employees to punch in and punch out every day.
The HR department then has to manually calculate employee hours while taking into account factors such as holiday pay and overtime to determine the correct pay for each employee. Both of these processes are highly prone to human error – costing your business thousands or even millions of pounds each year.
While many businesses think that installing a new, more modern system would be disruptive, the reality is that time and attendance systems and software can be up and running company-wide in as little as two weeks!
When you consider how easy it is to manipulate a paper hours record, and consequently how it is virtually impossible to catch this, the cost-benefit analysis is clear.
Why do people buddy punch?
There are plenty of reasons why an employee may choose to buddy punch; from running late and not wanting to face disciplinary action to lacking in motivation and knowing that an employer’s systems are outdated enough for them to buddy punch undetected.
Some of the most common reasons we see for buddy punching include:
1. Bad Timekeeping
Employees who are consistently late are perhaps more likely to turn to buddy punching in a bid to avoid disciplinary action. Those who have committed time theft over and over again without any consequences are also likely to continue this bad practice as they have realised they can still get fully paid by their employer despite not working their contracted hours.
2. Outdated clocking systems
Buddy punching is a common problem for organisations that utilise timesheets, swipe cards, tags, or proximity cards to clock in and out, as these systems are easy to manipulate and it can also be difficult to recognise when employees are stealing time.
3. Employees may be unaware of the repercussions
It is possible that your employees are simply unaware that by buddy punching, they are in fact stealing from their own company. Because there is no stealing of physical goods many people don’t realise that what they are doing is as severe as it is.
4. Lacking in motivation
According to a recent survey, 23% of employees said that if employers were more open and honest about the performance and overall health of the company, they would feel more motivated.
Lack of motivation and not caring about the organisation you work for can lead to employees simply not caring about hurting the business or its profits.
Buddy punching statistics
So how much money does time theft cost businesses? According to a study, a company can lose as much as 7% of its profits due to time theft.
To put this into perspective, if your company is earning £300,000 per year, you could be losing £21,000 annually because of stolen time – enough to pay for a year’s salary! While this may not be enough to bankrupt a business, it’s a large sum of money being drained from your business that simply cannot be overlooked.
Another study revealed that an average employee steals up to 4.5 hours from their employers per week. Annually, this adds up to 6 weeks of stolen time per employee per year.
As an example, using the UK’s average salary of £14 per hour, that means the average employee will steal £63 per week. Spread across a 52-week fiscal year, this totals £3,300 in costs associated with stolen time.
To then scale that up, if an organisation had 50 employees, that would be £165,000 lost due to time theft each year. The amount of money lost each year would also increase as the company grows and expands its workforce.
Industries Prone to Buddy Punching
While buddy punching isn’t an industry specific issue, there are some industries where buddy punching is more common because of outdated time tracking systems, difficulty in tracking time due to location and logistics or lack of time tracking altogether.
For example, within the manufacturing and construction industry, many workers on site may not be required to sign in or out of a physical building or location and therefore time tracking policies are not implemented. Other industries whereby a manual, paper-based signing in and out system is in place are also more at risk of employees stealing time.
For industries faced with the difficulty of not having employees physically present in a building in order to sign in, using cloud based time and attendance software which can be accessed via a mobile phone is a good solution to this problem.
What are the repercussions of time theft?
Aside from the financial loss that companies face due to timesheet fraud, which we have covered above, there are other negative effects that time theft can have on your business.
Employees who do work their contracted hours will be the ones that feel the hit of lost productivity and will often be the ones who have to swallow up additional work into their own hours to account for this. Not only can this induce stress and lack of job satisfaction, but it can lead to honest employees finding work elsewhere.
Additionally, if employees see that their colleagues are late, absent or taking excessively long breaks whilst going undetected, this can result in either the employee feel demoralised and disenchanted – as they can see that someone is getting paid the same as them for doing much less, or it can result in your employees being tempted to do the same thing.
If someone observes their colleagues getting away with buddy punching time and again, they are fully aware that they could do the same and companies are at risk of ever increasing workforce members that take advantage of their outdated time management systems.
How do you prevent buddy punching?
Your business is more susceptible to buddy punching if your time and attendance policies are too relaxed or if you use unsophisticated timekeeping practices.
Fortunately, there are steps that you can take in order to drastically reduce the chances of time theft within your organisation and some of these are:
Zero tolerance policy
Having a written zero tolerance policy is a great starting point when it comes to preventing buddy punching. Lots of employees don’t actually realise that buddy punching is stealing and sometimes, highlighting the severity of the issue and making people aware of the consequences is enough to bring an end to employees stealing time. Document your policy and go over it with your employees. Then make sure it’s posted in a place where it can be reviewed from time to time and can be easily accessed by all employees.
Rewarding hard work
When employees care about the company they work for, their loyalty and productivity increases. Implementing a system where employees are rewarded and recognised can be extremely effective with boosting morale and employee satisfaction.
For example, be flexible with shift workers who excel in their roles by either granting them the option to earn annual leave, gift vouchers or whatever incentives seem fit. By creating a culture based on honesty, transparency and trust, you can help to prevent time theft.
Online time and attendance
With our cloud-based time and attendance software, your remote staff can quickly and easily clock in and out on any device including mobiles, tablets, and desktop machines. As a manager you’ll have a clear overview of who is working at any minute of the day and get time reports at the click of a button. What’s best is the locked and secure system confirms the employee’s identity and eliminates buddy punching.
This is also a great solution for those businesses where employees may be working from home or hybrid working as a result of ever-changing employee needs since the onset of the COVID-19 pandemic.
Biometric time and attendance system
Installing a biometric clocking-in solution is one of the simplest and most effective ways to stop timesheet fraud. Mitrefinch’s biometric clocking device works by taking a scan of an employee’s fingerprint, and converting it into data which means it is not only impossible for others to clock in for you, but the employees’ privacy is maintained.
There are no cards or login details to lose or share with another so they can clock in a friend and the employee must be physically present in order to clock in and out so you can be assured accuracy in your data and that only the right people are getting access to the right places. Depending on your business needs, you can also choose from card and fob access, too.
To summarise, the statistics highlight that buddy punching is a real issue for UK businesses and that it can often go unnoticed for long periods of time if out of date systems are being used.
Tackling time theft needs to be approached with two prongs – both from a HR perspective and also from a technology perspective.
In terms of HR, we can see that time theft is often an outcome of employee dissatisfaction and distrust of their employer, whilst the statistics suggest that most employees would not partake in fraudulent behaviours if they felt that they were being treated fairly. This includes being paid at least minimum wage and having transparent and open communication between management and staff.
When it comes to using technology, the key to making a virtually foolproof system that doesn’t allow for buddy punching, relies on finding time tracking technology that is easy to use and integrates with multiple workforce setups. The technology should also seamlessly integrate with your payroll platform for easy consolidation and to mitigate human error.
Mitrefinch’s robust time and attendance solutions can provide clocking-in software that suits your needs exactly and helps your business save money on timesheet fraud. To find out more about how we can help contact us today.