How Buddy Punching is Hurting Your Business

April 8, 2018

Biometric authentication stops this costly form of time fraud

Time fraud isn’t always obvious or easy to detect. But when an employee accepts pay for time not actually worked, it’s considered a theft of time from the employer. To improve time tracking accuracy and reduce the risk of payroll errors, many businesses have implemented time and attendance systems. Unfortunately, time theft still occurs.

75% of businesses are affected by some form of time theft including the recording of inaccurate time, conducting personal activities on the job, and taking frequent breaks. Even worse, nearly 25% of respondents in this survey acknowledged that they had participated in buddy punching.

 

What is buddy punching?

Buddy punching is an overt form of time fraud where a co-worker clocks in or out for colleagues who aren’t actually present or on the job. Sometimes it’s for seemingly innocent reasons–for example, an employee gets stuck in traffic and doesn’t want to get in trouble for being late to a shift, so he asks a colleague to clock him in on time. In some extreme cases, workers have used buddy punching tactics to take entire days off or accrue overtime.

What may start off as 15 minutes one day can quickly snowball into big losses for employers. A study by Nucleus Research found that 19% of the workforce participates in buddy punching, resulting in losses of 1.5% to 3% of gross payroll. Buddy punching isn’t going away either. Recent research suggests that buddy punching could cost U.S. employers $373 million annually.

 

Why your current system isn’t working

Many time and attendance systems use an online portal, paper forms, or punch cards to log time. These devices are susceptible to time theft because anyone can do it–and often, employees will even share login credentials so a coworker can cover for them.

Unfortunately, “phantom time reporting” skews productivity tracking and related hiring decisions. It can also have negative ramifications for employee morale.

If your company relies on manual methods to track time and attendance, then you could be facing significant timecard fraud losses from buddy punching. It’s critical to take preventive measures now to regain control of your time and attendance as well as your payroll. Start with a clear and effective time policy that illustrates expectations for employees, as well as ramifications for noncompliance.

Train your management team to spot the signs of buddy punching and set up time to regularly review time cards. To further strengthen the authenticity and accuracy of time records, automate time and attendance tracking.

 

Use biometric authentication to eliminate buddy punching

More companies are replacing manual time tracking methods with biometric facial recognition or fingerprint scans to ensure employees are present when they clock in and out. Biometric systems give employers peace of mind, promote honest time recording, and improve payroll accuracy. There are two popular options:

Biometric facial recognition. New tools allow employees to take a “selfie” on their smartphone to clock in and out. The software pinpoints characteristics on the human face and, using pre-programmed algorithms, matches the photo to information in a database to confirm the image. It will flag any inconsistencies that don’t match the original.

Fingerprint scans. With the touch of a finger, organizations can verify employee attendance. Real-time push time clocks can be used that extract unique fingerprint characteristics and match to the employee’s finger image.

 

Fortify your defenses

Don’t let buddy punching steal time, money, or morale from your organization. Beef up your time and attendance policies. Educate your management team and teach them how to spot time card inconsistencies. To further strengthen your defense against timecard fraud, AsureForce Biometric Data Time Clocks offer biometric authentication to eliminate opportunities for buddy punching.