The Problem: Most employers will concede that their employees are being paid for at least 10 minutes of time during the day when the employees are not, in fact, working...
This time is usually a combination of when the employee walks in the door 5 minutes late in the morning, leaves 5 minutes early, takes a long break, or long lunch, etc...
A Robert Half Study issued in the mid-1980s revealed a startlingly high amount of weekly time lost to employee time theft, and more recent studies still yield equally uncomfortable results.
How do you calculate the cost of time theft?
Your numbers may be more or less than the 10 minutes we will use, so please feel free to plug in your own in the following calculations to see how much time (and money) you may be losing to employee time theft.
Multiply the [(minutes lost per day to time theft) x 250 (average working days in a year)] / 60 (minutes per hour)
-This will give you your Annual Average Hours Lost to Time Theft per employee
[10 x 250] / 60 = 41.67 hours lost to time theft (annual per ee)Multiply the (annual hours lost to time theft per employee) by (employee's average hourly pay rate) and then multiply that dollar amount by (total hourly employees on the payroll)
-This will give you your Company Total Annual Loss to Time Theft
41.67 x $10.00 x 12 ees = $5,000.40
But remember, it's not all numbers
Here's the kicker, time clocks can easily be viewed as a dissolution of trust between employer and employee, hurting morale.
They can add monotony and job dissatisfaction, and potential increased turnover (which can cost far more than any cost savings seen by installing a time clock).
Options?
Time & Attendance systems are available today that can collect time and be used as a communication tool between management and employees.
There are online clock options where employees can log in and view their schedules, see their paid time off accruals, send notes to management, and confirm their previous time worked.
Management can view and print reports based on time to help curb excessive overtime pay.
Payroll administrators don't have to manually tally time cards and can often import time data into their payroll systems to eliminate human error in tabulation and re-keying.
And storing of time card data is kept via cloud storage - satisfying time card storage labor laws without the liability of piled up paper time cards laying around the office.
What's next?
Understanding your team goes a long way in this process. If none of the employees, or management staff are comfortable using the Internet, the perceived value may not be positive.
If everyone within the company is more progressive online, these type of systems may be a very big win.
Most small business owners understand that inefficiencies that lead to cash and financial leaks need to be plugged for the long term health and survival of the business. These days, time & attendance systems have become very common place, and an understood necessity for some industries in particular, that rely heavily on managed labor costs.
For more information on time & attendance system options, please feel free to email me at Randy.Harris@adp.com
