As a business leader, how many times have you seen a timecard that has 8am – 5pm with a perfect 1 hour lunch break? Seriously, who works like that? The answer, of course, is nobody. So, why are you still trusting your employees when it comes to time keeping?
Many employers are already suspicious that their employees are stealing time but did you know that according to Software Advice, 43% of employees admit to inflating their time worked when self-reporting? In their mind, this is completely justified. They work hard for your organization and deserve a break. Although they may be correct in some aspects of that point of view, the time system is the absolute worst place to make these “self-corrections” to their compensation. If the time data is off, and research shows that it will be unless you are using a system to force accurate time keeping, this causes all of your job costing analysis to also be off. How do you know if you are profitable as a business? How can you compare one job to another and determine if you are making money? It is impossible to make good decisions without accurate labor data.
To solve this problem, many employers will task supervisors with recording time on behalf of the employees. On the surface, this seems like a great solution. Supervisors are typically very aware of the time being worked and they know the job-costing information. Supervisors are trusted individuals who have come up through the ranks and proven their worth to the team and to the company. There is only one problem: supervisors cannot be trusted either. Supervisors, as critical to the success of your company as they are, will fudge their employees’ time when given the opportunity. Why would they do this? Because they are in charge of keeping their direct reports engaged and happy. They use the time system as their personal bonus system. Mis-reporting late arrivals, early departures, breaks, and in extreme cases, absenteeism and even ghost employees- all leading to bad time data. Whether it is the supervisors or the employees committing fraud, it is still leading to bad data, still leading to bad decisions, and still leading to you overpaying by up to 8%!