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Buddy Punching: What It Is And How To Prevent It

A recent survey of approximately one thousand employees stated that 16% had clocked in for a friend or employee. Regardless of the reason, buddy punching is fraudulent behavior. So, what can you do to prevent it?

What is Buddy Punching?

time clocks

Buddy Punching is the act of clocking another employee’s timecard on their behalf. Hereby, employees exploit a loophole within the clocking-in and attendance system and receive pay for hours that aren’t actually worked. Such behavior is often perceived as trivial due to the lack of surveillance kept when punching one’s timesheet. 

Companies that retain manual, outdated systems such as punch-cards and paper-based systems are especially prone to Buddy Punching. The manufacturing and construction industries are familiar with this problem, where time tracking for each employee is not always viable. 

In general, there are 4 main reasons that Buddy Punching occurs;

  • Bad Timekeeping
  • Outdated Clocking Systems 
  • Unfamiliarity with the Repercussions 
  • Deeper issues that lead to Prolonged Absenteeism 

According to a recent study, a company can lose as much as 7% of its profits due to time theft, often related to buddy punching.

Impact of Buddy Punching

Buddy punching is a form of time and wage theft that is common among hourly workers. The impact of wage theft through buddy punching may be felt in many different areas of the company. The costs associated with buddy punching can be divided into 2 categories: Direct and Indirect Costs. 

Increased Payroll Costs

The unnecessary increase in payroll costs often takes place when a company is paying for overtime. Overtime pay due to inflated working hours from buddy punching creates trouble for the HR department. They are often tasked with making sure overtime doesn’t happen. With time theft, employees demand pay for the hours they clocked in for, rather than what they’ve actually worked. As a result, if each employee attempts buddy punching or any other time theft, overtime and other payroll costs significantly increase.

Research carried out by the U.S. Bureau of Labor Statistics suggests that a simple payroll loophole could cost U.S. employers more than $373 million every year.

Skewed Productivity Levels

The productivity of an employee is calculated by measuring the amount of work generated divided by the number of hours worked within a time period. Through buddy punching, the amount of work generated will be much less than what is expected. As the number of working hours clocked increases, an employer expects the outcome to also increase. But with no change in outcome, the productivity levels will consequently start to decrease. As a result, levels of productivity will be negatively skewed and this could create other indirect costs for the company. 

Decreased employee engagement

Decreased employee engagement can actually be both the cause of and the result of buddy punching. Employees could find themselves disengaged in work and isolated. This could result in employees resorting to malpractices such as buddy punching in order to earn money without spending long hours at the workplace. It might be the case that buddy punching isn’t the bigger problem for the employers, but the prolonged absenteeism might be. 

On the other hand, buddy punching may be just a loophole employees have found to generate wages without working. Consequently, time theft may lead to fewer hours worked in the workplace than required, resulting in lesser time with the company and other employees. This can lead to lower engagement between employees and the company. 

  • 43 percent of hourly workers surveyed admit to exaggerating the amount of time they work during their shifts.
  • One-quarter of respondents say they report more hours than they actually worked 76 to 100 percent of the time.

So, how does an employer prevent this from happening?

How to Prevent Buddy Punching?

Fortunately, there is a solution to this problem. Here are some of the ways that you can reduce, and even eliminate buddy punching in your organization: 

Geofencing

clocking in and out with geofencing interface

Geofencing is when an employer creates a virtual barrier around the workplace. To reduce buddy punching, a geofence will prevent employees from clocking in or out unless they’re within the geofence boundary. Geofencing relies on WiFi, cellular data, and GPS. These features make it one of the most dependable solutions to buddy punching. 

Geofencing features may be provided within different Mobile Timekeeping Apps, such as the Celayix Mobile App. These apps can make it much easier for employees to clock in and out with their phones. Provided the employees are within the geofence boundary, Check-in/Out with Geofencing allows and ensures precise time capture for your timesheets.

Biometric Time Clocks 

Biometric systems are hardware systems installed in the workplace used for verification of identity. Unlike other time clocks with pins or passcodes, a biometric system requires personal fingerprints or other biometrics to clock in/out. While this allows one’s privacy to be maintained, it’s main feature is to effectively reduce buddy punching and improve security in the workplace. 

Celayix’s iFace800 and other latest products are likely compatible with your time & attendance systems. With such Biometric systems, time theft can be reduced by as much as 97% because of the requirement of a unique fingerprint, handprint, or even retina scan. Biometric Time Clocks may seem expensive to implement, but it’s effectiveness makes up for all the financial costs associated with buddy punching.

Building a Culture of Trust and Transparency 

Finally, the reason behind buddy punching must be discovered, and any solution requires a sense of trust and transparency between employers and employees. While formal policies such as zero-tolerance may help reinforce discipline and reduce time theft, it is vital that there is a culture of Trust and Transparency within the workplace that would help reduce any attempts of time theft. 

Such a culture is always deemed positive in the workplace, and allows employees to feel accountable for their actions. Buddy punching and other types of time theft can be consequences of employee isolation and decreased employee engagement, and hence it is important that employers communicate with their employees and set expectations and guidelines in employee contracts or handbooks. 

Buddy Punching and Absenteeism: How it’s all Connected

Absenteeism refers to the habitual non-presence of an employee at their job. Habitual non-presence extends beyond what is deemed to be within an acceptable number of days or time away from the office for legitimate causes. If you are unaware of what absenteeism is, or how it affects you, take a look at our blog on ‘The True Causes & Costs of Absenteeism in the Workplace’

So far, we’ve covered the 4 reasons behind buddy punching, and the last one explores the relevance of absenteeism as the cause for buddy punching. How so?

Absenteeism can often take place due to a lack of an effective time & attendance system. Absenteeism leads to increased costs, reduced output and certainly leads to lower engagement with your workplace. Looking back at what was said about a culture of trust and transparency, lack of communication between employees and employers may result from absenteeism

The need of the hour is an affordable and easily-implementable time & attendance system. However, it may not necessarily be just used to reduce absenteeism. Buddy punching is another way where time and productivity are lost. Just a simple time & attendance system may not be enough. It’s important that a company or a workplace sets a set of guidelines that tackle the issue of time theft and prolonged absences collectively. By combining these guidelines with an effective time & attendance software such as Celayix’s software, employees will start to use their time at the workplace more productively, and consequently, you will be able to reduce buddy punching as well as absenteeism.

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