Running Your Business Remotely? Here’s How to Stop Employee Time Theft

March 9, 2021

Starting your own business can be exciting, but it can also be incredibly risky — especially during a pandemic. After all, 25% of total funding for early-stage entrepreneurs typically comes from credit cards or from bank financing. That means the stakes are high and that you probably can’t afford to incur any losses.

In many ways, the remote work setup that’s been embraced by all sorts of businesses over the last year is actually the ideal scenario for entrepreneurs and startups. It allows you to reduce overhead and keep your organization on the lean side while you get your operations off the ground. Remote work has also been shown to improve productivity among employees in many scenarios while reducing environmental impact and providing a better work-life balance. Remote work will most likely be the way of the future, even after the pandemic becomes nothing more than a distant memory.

Still, there are certain drawbacks to working from home. One such drawback is that employers may have less oversight into how their staff is spending their time. And while you’d ideally like to trust that your employees would act ethically, the reality is that working from home can provide ample opportunities for time theft. Let’s take a closer look at this problem and what you might be able to do about it.

What is Time Theft and Why Does It Matter?

Typically, employee theft comes in two varieties: embezzlement and misappropriation of trade secrets. Technically, time theft is a form of embezzlement, though it’s behavior that’s often normalized in both traditional and remote workplaces. Time theft refers to situations in which an employee is paid for time spent not doing their job. Common examples of time theft might be taking a longer lunch break than allotted, completing personal activities while on the clock, or altering time punches to reflect inaccurate working hours.

It’s important to note that small, irregular incidents involving time theft probably aren’t worth worrying about — especially while working from home. If an employee takes a five-minute stretch break to make themselves a cup of coffee, that shouldn’t be cause for alarm. But if you’ve noticed one of your team members is, for example, consistently unavailable for morning meetings and won’t answer their emails until later in the day while tracking their normal work hours, something might be up. The same goes for an employee whose productivity has steadily declined over the last year while working from home, despite maintaining the same responsibilities. While these patterns are no guarantee that time theft is going on, it may be worth paying attention to.

So why does time theft matter? While it makes sense that you’d want to cut your staff a little bit of slack during the ongoing pandemic, it’s important that you put a stop to employee time theft once it’s discovered. Ultimately, an employee who commits time theft is taking advantage of you and your business — and it could cost you dearly. According to Forbes, one study showed that the average employee steals around 4.5 hours per week from their employers, which equates to six full work weeks per year. Other statistics reveal that time theft costs employers $400 billion per year, with one in four workers admitting to exaggerating their hours worked at least 75% of the time. In the end, that means you’re paying people you trust not to do the work they committed to doing. When you own and operate a small business and you’re already dealing with economic hardship, you’ll want to nip this behavior in the bud.

How Does Remote Work Make Time Theft More Tempting?

It’s highly likely that during our current health crisis, the temptation to commit time theft has only grown stronger. When an employee fails to arrive at the office at a certain time, there’s usually some evidence of that fact — even if their punch clock says otherwise. And in an office setting, it’s pretty difficult to take a nap in the middle of the day without anyone noticing or leaving to run a personal errand without anyone being the wiser.

But when an employee works from home, there may not always be safeguards in place to ensure that they’re actually working when they’re on the clock. Working remotely also allows work-life balance to become more blurred, particularly for those who don’t have designated office spaces at home. It might not seem like that big of a deal for someone to put in a load of laundry or eat while they look at their email inbox. But realistically, no one can multitask in that manner. That means that the employee won’t be doing work during that time, which ultimately translates to time theft.

How Can Entrepreneurs and Business Owners Prevent Remote Employee Time Theft?

One thing to note is that a worker who commits time theft — either knowingly or unknowingly — isn’t necessarily a bad employee. This behavior has become normalized and may actually be expected during this remote work wave. Still, that doesn’t mean you have to accept this scenario as inevitable. Even if you run a very small business or are new to management, you can prevent this issue from derailing your operations.

For one thing, it’s important to set clear expectations. For many people, working remotely was a whole new world — and if you and your staff had to suddenly adjust to life outside of an office, you might not have had time to craft clear policies to prevent time theft. If you plan on continuing to work remotely this year, you’ll want to update your policies to reflect appropriate and inappropriate behavior, as well as defining employee time theft and how punches need to be tracked. It’s also possible that you may want to require more frequent check-in meetings with individual employees or to mandate employees to turn on their webcams during company meetings. However, you should be careful to steer clear of micromanagement, as this can foster a culture of distrust within your business and breed feelings of resentment.

You may also want to use technology to your advantage. The average enterprise uses 500+ software applications, but you may need to be a bit more selective about the platforms you use and pay for if you’re running a smaller business. With that in mind, time clock software may be a good investment for you to consider. This makes it impossible for staff members to clock in their co-workers or for employees to manipulate their punches.

Improving your company culture might not sound like a solution, but it’s actually one of the most effective ways to prevent time theft — even when your staff is working from home. Making positive changes to your company culture when you aren’t physically in the same room can be a challenge. But investing in your culture can keep employees more engaged and encourage honesty. As a result, they may be more likely to take time off when they need it or take advantage of their flexible work hours as necessary, rather than commit time theft and risk their position within the company. In general, you should never assume the worst of your employees — and if you do suspect time theft is going on, use it as an opportunity to improve your culture, rather than as an excuse to discipline and micro-manage.

There’s no doubt that time theft is a very serious issue, even if your organization is small and you have only a couple of employees. But knowing how to prevent or reverse this trend when working remotely can allow you to build a better business in the long run.

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