Employees looking out for each other is always a good thing to see. Well, until they conspire with each other and clock in on each other’s behalf.
Washington Post advice columnist Karla Miller got this question from a reader:
“One of my colleagues has started asking me to clock out for her at the end of the day. She comes in after me but wants to leave early. On days when I am staying late, she will ask me to sign her out when I leave. I’ve noticed that this co-worker does not sign out for any breaks or lunch, although she takes long breaks and a two-hour or longer lunch every day.”
Buddy punching is one of the oldest forms of time theft. It may seem like a petty offense, but it’s not. Especially if it’s costing companies in the United States 373 million dollars annually.
Yes, you read that right. 373 million dollars leaking from the economy because John Doe asked Jane Doe to clock in for him because he’s going to be 15 minutes late. Not so petty now, right buddy? How could this be affecting your business?
According to Nucleus Research, you could be losing 2.2% of your annual gross payroll to buddy punching.
Company X has 20 full-time employees. The current average weekly earnings for salaried employees is $951.50 per week. This will total to about $76,000 in monthly payroll expense. This means that Company X could be losing about $1,700 per month in payroll expense due to buddy punching or more than $20,000 per year.
Buddy punching involves serious money, so it should be proactively addressed.
The first step in putting a stop to buddy punching in your company is being aware of the signs that it’s happening.
Below are 3 of them:
1. Extremely low or almost non-existent tardiness/absenteeism. You might be thinking, good, my employees are so responsible that they are almost never late. However, no workplace is perfect. According to CareerBuilder, 29% of employees show up to work late at least once a month. Of course, you want the tardiness rate for your company to be lower than this. However, the reality is, there’s no such thing as a tardiness-free office. If it seems tardiness in your company is almost non-existent, it could be a sign that employees are colluding to clock each other in.
2. Employees are logging in hours, but the work isn’t getting done. Of course, there could be other factors that might be causing this, but it could also because some employees are clocking in hours even if they’re not at work.
3. Other anomalies in your employee time entries. If you’ve been involved in tracking your employees’ work hours in the past, there would be some time entry anomalies that you will notice. For example, employees clocking in and out almost simultaneously, almost identical handwriting on logbooks, and so on and so forth.
The signs above do not guarantee 100% that buddy punching is happening in your office. However, they should be enough to prompt you to dig deeper and investigate.
Buddy punching is a form of fraud. If you’ve confirmed that some of your employees are committing buddy punching and if fraud is grounds for termination in your company, you can opt to terminate them. However, buddy punching is a recurring, insidious disease. If you don’t do anything to stop and prevent it, it will haunt you over and over again. Fortunately, buddy punching is a workplace problem that is highly preventable.
Below is a 5-step action plan to prevent buddy punching.
Just remember the word P.U.N.C.H.
In the majority of the cases, time theft occurs because of inherently dishonest employees. Time theft can also be the result of negative employee sentiments in the workplace. They commit time theft as a form of retaliation against their bosses. This can stem from several reasons, including:
Even if you believe that your work environment is ideal, you should still conduct a temperature check among your employees and try to uncover anything that could lead to buddy punching.
One of the strongest defenses that you have against buddy punching is to put it in writing. Technically, buddy punching is fraud. Create a zero-tolerance policy against fraud in your company and include buddy punching under the list of offenses. The punishment is up to you. It can be a short suspension on the first offense to delivering a stronger message — immediate termination.
Imagine putting a “Do Not Enter” sign on a wide open door.
That’s precisely what’s happening when you’re trying to prevent buddy punching using dated time tracking technology. It is extremely easy to insert a colleague’s time card into a Bundy clock or write another person’s name on a sheet of paper.
The time tracking method that you use is the primary deterrent against time theft. A number of advanced time tracking technologies have emerged recently. There are plenty of options for your business.
As for features that can prevent buddy punching, consider time tracking apps that have the following:
A combination of these features will make it difficult, if not impossible, for your employees to commit buddy punching.
Your employees will be more hesitant to commit buddy punching if they know that several people are watching. Normally, for a small business of 20 employees or less, the business owner is also doing many of the HR functions. This includes time and attendance tracking.
Ideally, as a small business owner, you shouldn’t spend the majority of your time worrying about issues such as buddy punching. The focus should be on growing your business and strategizing to increase your income stream.
Employees are more hesitant to commit buddy punching if they know that colleagues are allowed to report such incidents. This is not to pit employees against each other. Rather, it’s creating a workplace culture wherein employees are accountable to one another.
Happy employees will avoid doing anything that will jeopardize their jobs. They will treat the company as if it’s their own. There’s very little room for fraudulent employee behaviors such as buddy punching if you have a positive company culture.
Buddy punching is an age-old problem that has been plaguing small businesses. Recent research on buddy punching has revealed just how significant financial loss it can create.
As serious as buddy punching is, it’s also easy to stop and prevent. Combining changes in workplace policies, company culture, using time tracking technologies, as well as the above P.U.N.C.H. framework will help you knockout buddy punching in your company for good.
Dean Mathews is the founder and CEO of OnTheClock, an online employee time tracking app that helps over 8,000 companies all around the world track time. Dean has over 20 years of experience designing and developing business apps. He views software development as a form of art. If the artist creates a masterpiece, many peoples lives are touched and changed for the better. When he is not perfecting time tracking, Dean enjoys expanding his faith, spending time with family, friends and finding ways to make the world just a little better. You can find Dean on LinkedIn.