If you have employees, then you most likely experience some level of time theft. You just may not know it. 

Time is one of a business’s most valuable resources. When employees misuse company time for personal purposes or fail to accurately report work hours – aka commit time theft, also referred to as time fraud – they are silently stealing from you and killing productivity. 

Whether it’s late starts, extended breaks or inaccurate time reporting, time fraud can add up quickly, creating inefficiencies and draining valuable resources. Here’s how time theft affects skilled trade businesses and what you can do to minimize it.

The Impact of Time Theft Across Trades

Time fraud costs U.S. businesses a staggering $400 billion annually, underscoring the significant financial burden it places on companies across all industries. The skilled trades sector is particularly vulnerable to this issue, as the nature of the work often involves off-site locations and less direct supervision. 

In industries like construction, time theft can lead to project delays, cost overruns, and reduced profitability. The Construction Industry Institute (CII) found that time theft could account for up to 50% of a construction project’s total labor cost.

Similarly, in the manufacturing sector, time theft can drive up labor costs, reduce productivity and hinder competitiveness. The American Payroll Association (APS) estimates it could cost manufacturing companies up to 7% of their gross payroll annually. 

These statistics highlight the urgent need for skilled trades businesses to take proactive measures to reduce time fraud. By implementing effective strategies to address this issue, companies can protect their bottom line, improve productivity and maintain a competitive edge in their industry.

The Cost of Time Theft

Time theft is more common than many business owners think, and its effects can be far-reaching. In fact, a report from the National Federation of Independent Business (NFIB) suggests that time theft costs businesses billions of dollars annually. 

For skilled trades, where hourly wages are high and labor is integral to the operation, time theft can seriously impact the bottom line. Even small discrepancies in time reporting or delays can add up, leading to significant financial losses over time.

Common Causes of Time Theft in the Skilled Trades

Time fraud in the skilled trades can take many forms, including:

• Late Starts: Employees arriving late or starting work later than scheduled.
• Extended Breaks: Taking longer breaks than permitted or using break times for personal matters.
• Unauthorized Personal Use: Using company time for personal phone calls, errands or socializing.
• Inaccurate Time Reporting: Recording hours inaccurately or inflating worked hours on timesheets.

These actions, while they may seem small, add up over time, and businesses can lose thousands of dollars annually.

Strategies to Prevent and Reduce Time Fraud

Fortunately, there are several proactive strategies you can implement to minimize time theft in your skilled trades business:

• Implement Clear Policies: Set clear expectations regarding work hours, breaks and appropriate use of company time. Ensure all employees understand the consequences of time theft.
• Use GPS Tracking: Incorporate GPS tracking for field employees to monitor their locations and verify that they are where they need to be. This can help ensure that employees are accountable for their time on job sites.
• Adopt Time Clock Systems: Use digital time clock systems that allow employees to clock in and out, track their hours accurately and reduce reporting errors.
• Regular Audits: Conduct regular audits of time logs to spot inconsistencies, monitor patterns and identify potential issues. Use this information to address concerns before they become bigger problems.
• Employee Training: Train employees to understand the importance of accurate time reporting and the value of productivity. Foster a culture of accountability and encourage employees to take ownership of their time.

Creating a Culture of Accountability

A key part of reducing time fraud is creating a culture of accountability within your business. This means setting a strong example of integrity, transparency and responsibility from the top down. 

Encourage open communication and let employees know that their contributions are valued. Recognize employees who consistently demonstrate productivity and reliability, and provide feedback when necessary to ensure continued compliance with time management policies. 

Incorporating these strategies into your business operations will help you minimize time fraud, increase productivity and enhance profitability. By fostering a culture that values time and encourages responsible behavior, you can set your skilled trades business up for long-term success.

Tackle time theft and boost your business’s productivity. Book a call with Operations Laboratory today. Our experts can help you implement effective solutions to minimize time theft, streamline your operations and create a culture of accountability. Let’s work together to optimize your workforce and improve your bottom line.