Small companies often have a lot of manual tasks related to HR. Take timesheets. Manual systems such as punch cards and clocks, mixed with a few digital tools, can make for an unnecessarily complex process. But then there is the worrisome process of time theft, which costs employers $50 billion a year. What is time theft, and how can you stop it?
Auditing Your Misreported Timesheets
If you’re managing payroll manually, the chances are high that you’ve overlooked auditing misreported timesheets. These small issues can add up to big money over the years, and it is a significant drain on businesses of all sizes. The data shows us that employees who report extra time on their timesheets snag more than four extra hours a week—and that adds up to big money out of your pocket.
Time theft is a hard-to-manage type of vandalism toward your business. When employees or contractors manipulate your systems, and your HR teams don’t have time to monitor this closely, you’re paying for work that wasn’t completed. Some of the ways to cheat your payroll system include:
- Punching in a buddy’s time. Manually clocking in and out is still common in most companies. In a process called “buddy punching,” one employee leaves early while the other one punches out on time with their timesheet, and their buddy’s time card. This process, if not caught, can spread across a team and then between teams—before long it’s a generally accepted practice that costs you big bucks over time.
- Timesheet fraud is easy to do with remote workers. Manual timesheets require a certain level of trust and honesty from your workforce. Whether the time is being recorded manually or through software, it’s easy to pad an hour here or there until it starts having a significant impact on your bottom line. Rounding a timesheet to the nearest hour, for example, can add up.
- There is also on-the-job time theft, where the employee spends more time browsing the YouTube channel when they should be working. This lack of productivity costs you real money in the long run.
- Overtime is a huge drain on companies. Part of the problem is in resource planning, where management has trouble understanding the volume of work versus the number of labor hours they’ll need. But employees that are unproductive on the job and then stay late to finish tasks are an unnecessary drain on the company. If the work doesn’t justify the expense, the only one benefiting from overtime is the worker. According to the Fair Labor Standards Act, you must pay that time and a half, whether you authorized it, or not.
How can you prevent all of these cash drains on your company?
The reality is that the administrative process of collecting and distributing timesheets can take away so much time. This leaves very little time to conduct regular audits of the hours worked and the impact on your productivity. What is the answer?
If you’re worried about the significant costs of accurately managing your employee time, you don’t have to. With an EOR like FoxHire, we use the best digital tools to automate the time worked, payroll, and HR processes so that you are maximizing your employee output. Our analytics tools help employers audit time worked, productivity, and so much more of the HR process to ensure your ROI. Talk with our team today about how our work can make your company stronger.