Attendance Fraud: Cunning employees cost companies Rs 28 lakh crore!

Gone are the days when employees and companies used to have a manual attendance marking system. Now, most of the firms have shifted to digital attendance marking systems like biometrics or card swapping machines. While the biometric system mandates the presence of the employee as it marks attendance using fingerprints, the card punch system records attendance using the ID card of the employees. Though there are negligible chances of misuse of the biometric system, the employees of the company which uses ID cards for marking attendance may certainly take it for a ride. 

It's well known that poor or erratic attendance negatively impacts a company’s performance. The shift to digital attendance was considered a boon for companies who wished to expel the chances of attendance fraud. However, contrary to this assumption, the American Payroll Association has said that every year companies in the USA lose 15-20 billion dollars in direct ‘Attendance Fraud’, with productivity losses exceeding 400 billion dollars (Over Rs 28 lakh crore).  

So what is ‘Attendance Fraud’ really?

Should missing a few attendance entries be labeled as fraud? It should when it cost companies large sums of money. According to Zaheer Hussain, an HR expert in India, who used to run a six sigma consultancy, “Statistics indicate that 3 out of 4 people don’t always report accurate attendance. Many companies don’t really realize the impact of this, as they are too busy concentrating on their core businesses. However, if you add it all up, it suddenly becomes a very alarming statistic, and this is when words like attendance fraud get thrown around”. 

Alternative solutions to biometrics and card readers are not available as an end to end solutions. Tracking, tagging staff, and other individual solutions are available as different modules in different software.  

"Biometric devices were considered to be more accurate. However, they can still be manipulated easily. We have observed patterns where employees have become more punctual, careful and productive at the workplace when we shifted to digital attendance systems," said Anant K, Head of Human Resources of a leading multi-national firm operating in India and the Middle East.

Anant added that his firm is now looking to take this one step further with the help of big data and observing behavioral patterns of employees at work. "This not only helps us identify underperforming employees but also reward the performers," he said.

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Keeping an eye on the employees using their phones

Yes! Gradually the company's are now shifting to SaaS-based solutions that do away with the need of complicated installations and is set up on the employee's mobile. This not only allows the employee to sign-in when they start their work and signs-out when then finish but the system also checks the employees at regular periods and registers their behavioral patterns. 

“The SaaS-based solutions goes a long way to solving the productivity issues and also match biometrics and card readers on cost. It can work for staff who don't have smartphones as well," said Dr. Joseph Rasquinha, the Co-Founder & CEO of Blueleaf Cyberspace Systems. Blueleaf Cyberspace is a Bangalore based startup doing significant research in the field of human resource optimization and management. 

Data indicates that the Biometric market is estimated at 45 billion dollars worldwide and around 3.5 billion in India.