What Is Employee Time Theft and How to Minimize It?

Employee time theft is a modern business problem, especially for companies that have a distributed team or were forced to go remote due to a higher power like the coronavirus pandemic. 

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When you have limited control over your employees, how can you be sure they are actually spending their working hours doing the job you are paying them for and not watching funny videos on YouTube? 

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Use employee time tracking software!

What Is Time Theft?

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If you think you’ve somehow found yourself in Alice in Wonderland - don’t worry, you are safe and sound in the real world. 

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But in case you are indeed wondering what time theft is, we are here to offer a helping hand. 

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The term time theft refers to employees clocking in working hours, but not doing the work for at least part of that time. 

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This can cost the company a great deal, especially if the employee is paid by the hour because it is simply money down the drain for them. 

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It’s also why most companies are aware of the issue and are actively trying to prevent it in their own midst by using time tracking software. 

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Once discovered by the employer, the worker who has been avoiding his professional duties without a good reason is usually terminated very quickly from the job. 

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This means that they are ineligible for unemployment benefits and they are obligated to disclose it in all job searches going forward. Sometimes, the company can even sue the employee for damages if such gross misconduct has caused them significant reputation damage and financial loss. 

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Tracking employee clock-ins and outs is not enough in this case, but it certainly makes a good start toward identifying whether employees are productive at work or not. 

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Time Theft Statistics

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Research conducted on the topic has shown that 75% of businesses that haven’t implemented employee time tracking software are victims of time theft by their employees. Their losses from it equate to $11 billion every year or as much as 7% of the gross annual payroll. 

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Furthermore, every other employee admitted that they have used the buddy punching system at some point - being signed in to work by a colleague - which has cost their companies over $370 million yearly, according to research. 

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Moreover, it is believed that as many as four hours per week are spent on unproductive activities. That time is paid for by the employer who at the end of the year has been shorted by over 200 paid working hours - in part since they failed to implement billable time tracking software. 

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At the same time, studies show that only 20% of working hours are spent on critical or high-priority tasks, which means that the rest of the working hours consists of interruptions of “little to no value at all”. 

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Bear in mind, you can’t actually expect people to work consistently for eight hours a day - every day - with the same level of productivity. We must be reasonable here. Highs and lows in terms of work efficacy are completely normal, but the practice has confirmed that by simply implementing software to keep track of computer use, you can boost productivity in your organization. 

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How Can You Reduce Time Theft in Your Company?

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It’s better safe than sorry, they say. 

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Because of all the financial repercussions time theft can have on your company, it’s clear that it’s in your best interest to do all you can to prevent it from ever happening. 

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There are several tactics you can utilize to cut down on employees wasting their working hours and your company resources in the process:

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• Open communication and clear goals
• Practice accountability 
• Conduct exemplarily 
• Be understanding and don’t assume 
• Install employee time tracking software. 

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Open Communication

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It’s very important to set clear expectations from your employees right from the start. Whether you’re working from the office or not, this practice will ensure everyone knows what their duties consist of, what results and working tempo are expected, and what will happen if set goals are not fulfilled. In this sense, defining KPIs not only on the company level, but also for each team and its members individually can greatly boost business potential. 

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While using employee monitoring software like Insightful will point to issues in terms of poorly designed processes and inadequate use of tools, it’s also beneficial to create such a culture within the company where everyone is free to share working difficulties, especially those that affect their productivity, with the rest of the team and management. 

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Improve Accountability

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Once you’ve set expectations from your staff, you need to make sure they have a sense of accountability for the way they do their job. A reasonable and relevant excuse for any sort of failure on the job can be accepted once or twice, but employees must be aware that everything they do or don’t do - well and on time - reflects on the company’s bottom line, and by extension their own. 

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Not that you should wield billable time tracking software as a weapon against them and their working habits, but make them understand that implementing one is to help them be more productive so that that can reflect on the company financial balance as well. 

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Set the Example

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Engaging in time theft consciously or not, always have in mind that, unless they have inviolable work ethics, employees will emulate the behavior they see from their superiors. 

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For example, a boss is only present on Mondays because they have to attend meetings all day long, but cannot be found on Tuesdays, Wednesdays, and Thursdays to provide feedback on tasks until they show up again on Fridays because the entire staff has a town-hall meeting with the CEO. 

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Even if the company is not using remote employee monitoring, it’s pretty obvious that this boss is not keeping regular attendance and is thus not setting a very good example to their team members. 

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So, what can you do about it? 

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If you’re the company owner or CEO, deal with your management. Just because they are not in the lowest position in the company and have others to pick up their slack for them, they shouldn’t be privileged if that ruins productivity in their team and ultimately in the entire company. 

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This will also signal other employees that this sort of behavior is unacceptable no matter where you are on the corporate ladder. 

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Only then will your other employees gain confidence in the idea that everyone is equal in this sense - whether you’re using employee time reporting software or not. 

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Be Understanding

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Whenever you notice irregularities in the way your employees are handling their workload, it stands to reason that there is an underlying cause for that. 

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Whether that’s personal issues, burnout, miscommunication or ruined relations with other colleagues, excessive workload, lacking skillset, dissatisfaction with the job or salary - it can vary from one employee to another. 

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It’s up to managers to investigate, offer help - time off, option to expand the team, additional training, better work conditions, raise - and most importantly be understanding and unassuming. 

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It’s up to the managers to see the problem and do what they can to solve burning issues and help bring employee productivity back to acceptable levels. 

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Install the Best Time Tracking Software

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If you want to minimize time theft and increase control over how your staff is spending their time at work, use a solution designed especially for that purpose. 

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By using Insightful’s software, you can take screenshots manually, randomly, or when triggered by suspicious activity, but it also keeps track of their keystroke activity, as well as website and app usage. 

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The last point is particularly useful as this is where you get a complete insight into how your staff is spending their time in the office - virtual or physical. 

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One of Insightful’s employee monitoring software’s strengths is that it allows managers to label particular websites and apps as productive, unproductive, or neutral in congruence with the description of each employees’ job. 

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For example, it makes complete sense for your HR manager to spend a big chunk of their time on LinkedIn or even Twitter in order to get a good feel of applicants before interviewing them for the open positions in the company. 

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However, the same cannot be said for customer support representatives, which is why social media sites would be flagged as unproductive in the Insightful’s employee monitoring software by their manager. 

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This feature is particularly useful for large teams as it enables the manager to keep an eye on numerous employees with little effort.  

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Conclusion

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The decision about which tool to use will ultimately come down to the features it has and how useful they are to you. With plenty of options, you have your work cut out for you. 

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Make sure to pick employee time tracking software that fits your purposes, company culture, and pricing range. 

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Not only will you minimize the costs caused by employee time theft, but you will also be able to raise company productivity in the process. 

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This article was originally written on August 16th, 2019 by Aleksa Misic. It was updated on July 1st, 2020 by Aleksandra Djordjevic.