Time and Attendance Is Not An Option
Buddy punching costs employers, but many companies are reluctant to upgrade their systems due to financial constraints. There are some options available to small businesses that are quite affordable. Before considering an upgrade for your time and attendance system, let’s develop a better understanding of just how costly fraudulent time tracking is for small businesses.
What is buddy punching?
Buddy punching is the practice of entering another employee’s information into a time and attendance tracking system in their absence. If a person knows they are going to be late, they can request that an employee punch in their information. The busy employer will never know the difference, and the employee can avoid any negative consequences that come with being late. Once the employees share login information or have access to eachother’s cards, they can complete the process undetected.
Understanding true costs of buddy punching in time and attendance tracking
According to research from the US Bureau of Labor Statistics, there are at least 78 million hourly workers in the workforce. If just 16 percent of those in the workforce added 15 minutes to their peer’s timecard in a time and attendance system, the total wasted by employers is $373 million. Buddy punching impacts 75 percent of businesses in the US. On average, an estimated 4.5 hours are lost on a weekly basis to time stealing. When all of this is added up, one can earn an additional 6 weeks of vacation a year on top of their actual paid vacation provided by their employers. A payroll survey estimates that anywhere between 3 and 5 percent of their payroll costs can be attributed to fraudulent time and attendance entries like buddy punching. If an employer has a team of 100 employees making less than $10 an hour, the company stands to lose nearly $2 million in just one year, if 3 percent of payroll is affected by these fraudulent time and attendance input practices.
How affordable is time and attendance tracking?
When you consider how much is lost to costly practices like buddy punching, upgrading to a more reliable time tracking system is more than feasible. Consider the estimated 3 percent of payroll costs the average business probably uses in a year. A solution like MinuteHound could cut down on these practices due to its biometric fingerprint technologies. A small company with 30 people at just one location will pay $39.95 per month after the one-time investment in a $99.95 system used to process the fingerprint punches. A company with 100 employees can expect to pay $104.95 each month for the services. For less than $1,500 each year, an employer with 100 employees can save millions annually in reducing buddy punching and other fraudulent time tracking practices.
Most employers can afford to invest in an accurate time tracking solution like those offered by MinuteHound. The investment pays for itself in a month, potentially saving the small business with 100 employees an estimated $166,000. Some employers find it worth the investment.
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