What Is Buddy Punching?
Buddy punching, time theft or time sheet fraud is the phenomenon by which employees clock in, swiped keycards or scan fobs on behalf of their colleagues, circumventing the usual systems of checks and balances. This ultimately results in employees being paid for work they have not done, costing companies across Ireland thousands in lost productivity every year. Buddy punching is nothing new – Workers have been doing this as long as clocking in systems have existed–One of the main reasons for this is the simple fact that manual based processes such as key cards or fobs have facilitated this. In 2023 there are still many industries that rely 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.
Manual or paper based processes represent a significant burden for HR teams, many of whom have to deal with the cumbersome process of reconciling manually recorded hours, holidays and absences and ensuring that they are correctly entered into their payroll. This lack of automation leaves businesses wide open for error, with the potential costs for errors or non compliance with pay running into the thousands.
Conversely, the importance of getting pay right often means that businesses shy away from exploring the possibilities of a new time and attendance solution, perceiving it as a risk or something which will cause widespread disruption within the business-, 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.
What causes people to buddy punch?
There are plenty of reasons why buddy punching exists:; from running late and not wanting to face disciplinary action to just simply lacking in motivation and understanding that an employer’s systems are outdated enough for them to buddy punch undetected.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. Poor Timekeeping
Employees who are consistently late are perhaps more likely to turn to buddy punching in a bid to avoid disciplinary action. These repeat offenders speak more to gaps in processes and lack of proper visibility of hours work which incurs continuosly mounting costs for organisations and actually empowers late employees to continue to game the system in this way.
2. Outdated clocking systems
Buddy punching is often a direct result of employees manipulating known flaws within the systems they use. Manual processes such as time sheets and peripherals like keycards and fobs make it all too easy for buddy punching to flourish.
3. Employees may be unaware of the repercussions
Often buddy punching is seen as a colleague doing a favour for another and helping them avoid disciplinary actions as a result of habitual lateness. In many top down organisations, the consequences and cost of inaccurate time keeping is very rarely communicated to employees, meaning that workers have little context of the severity of buddy punching.
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. Exhaustion and a sense of lassitude with an organisation can all too easily allow bad practices such as lateness and buddy punching to flourish
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 Euros 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 Ireland’s average salary of €26.22 per hour, that means the average employee will steal €117 per week.
As an organisation grows and salary bands increase, this also allows room for exponential growth of these loss of earnings as more and more profit walks out of the door as a result of poor time keeping.
Which industries are Prone to Buddy Punching?
While buddy punching is by no means restricted to specific industries, there are certain sectors where it may be a more common phenomenon 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 time theft. 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?
The most obvious impact of buddy punching for businesses is the financial losses accrued by inaccurate time keeping. What is spoken of less frequently however is how a culture of buddy punching can impact the wider workforce in more fundamental ways. Employees who make a habit of lateness or buddy punching inevitably find that the shortfall in their hours have to be made up for by their colleagues, leading to additional strain for employees and breeding an air of discontent amongst the workforce.
Furthermore, honest employees who witness habitual lateness without repercussions can often end up feeling disenchanted and feeling as thought their efforts to be punctual aren’t rewarded. Also, 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. The more that buddy punching and habitual lateness is allowed to flourish, the greater the temptation for even the most honest of employees to do the same, particularly if repeat offenders aren’t being pulled up.
How do you prevent buddy punching?
Buddy punching only truly becomes endemic within an organisation when allowed to flourish. Fundamentally, habitual lateness and buddy punching thrive in an environment where processes and systems of checks and balances are lax or open to abuse. With time and attendance, this is most pronounced when looking at organisations who rely heavily on manual or paper based processes to record hours worked.
Zero tolerance policy
A Zero tolerance policy is a good starting point for tackling habitual lateness, albeit one which has to be handled delicately in case people are punished unfairly for legitimate, occasional lateness. The strength of zero tolerance is that it allows you to communicate the severity of buddy punching and lateness and offers employees proper context around how it effects colleagues and the wider organisation. 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.
Reward 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.
Remote time and attendance
With our cloud-based time and attendance software, your staff have the ability to clock in when and where they need to, be it from desktop, tablet or mobile devices. This allows a greater sense of continuity between remote and office based employees and also allows for greater flexibility for remote workers where they can work their schedules around domestic disruptions.
Biometric time and attendance system
Installing a biometric clocking-in solution is one of the simplest and most effective ways to stop timesheet fraud. Advanced’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.
In closing, we can see that buddy punching and habitual lateness are habits which largely arise from gaps in processes which allow employees to game the system. When employees avoid repercussions for lateness, this also empowers colleagues to follow suit, often with little appreciation of how it affects the wider business.
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 behaviour 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. Advanced’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.