Business owners are asked to navigate an array of obstacles on their path to success, but one of the biggest threats to their company’s profit is theft. In business, theft is more common than people may think, though it’s not the type of thievery they see in tv or movies. Instead, what many businesses don’t realize is that the most common type of theft is actually employee theft.
Theft in the workplace can be an uncomfortable topic for business owners. You never want to assume one of the people you’ve hired and trusted would steal from you and your company. It may seem unlikely but the reality is that stolen property and cash is much more likely to happen at the hands of your employees than anyone else.
Employee theft prevention starts with understanding it. How should you deter, detect and deal with employee theft? We’ll address these questions and more as we break down how to prevent theft in the workplace.
Understanding Employee Theft
None of us want to think that anyone we work with or for us is capable of stealing. However, on average, 34% of company losses come from employee theft (according to several independent studies). Another study states that 75% of people said they have, at one time, stolen from their employers.
That’s a staggering and disheartening number. While some of those may be minor offenses like taking toilet paper from the office, the reality is people do steal from their employers for one reason or another. Being proactive is vital to protecting your profit margin. We don’t want to be suspicious and untrusting of everyone, of course. However, we also don’t want to wear blindfolds or be naive. There is a happy medium to strike.
Now that we have some background, here are some things to keep in mind for deterring, detecting, and dealing with theft in the workplace.
How to Deter Theft In the Workplace
Hire honest people
The first way to deter employee theft is to know who you’re hiring. Background checks are extremely helpful, but they don’t always unveil everything. Have someone involved in the hiring process that is a good judge of character. This doesn’t guarantee your new hire won’t end up being less than honest, but it certainly helps.
Make your employees feel valuable
Making the people you employ feel valued will also help deter theft in the workplace. Employees that feel like they matter, and are a part of things, are less likely to steal from their employers. Well compensated staff are also less eager to take chances, as they have more to lose and show more loyalty.
Another way to make it less tempting for employees stealing from work is to avoid giving them the opportunity. Supervise employees closely and pay attention to inventory, cash, and anything else someone may want to walk away with. If you have someone that handles your finances (checks, deposits, etc.), always be aware of what’s going out and in.
Limit access permissions
You may also consider having security measures installed on your work computers. Open access to confidential or sensitive information should be limited to only those that absolutely have to have it. Be clear that this isn’t a slight to those losing access to items previously available to them and is only a precaution to avoid diluted password logs and better security measures.
Reward employees for honesty
Having a system in place where your employees can report suspicious activity by their peers confidentially or even anonymously is s another employee theft prevention tactic. This gives you a few extra sets of eyes in your workplace and will make potential thieves think twice before mentioning any bad ideas they may have to their peers.
If you can afford it, purchasing security cameras is something you can do immediately to help prevent employee theft. If someone knows there is constant surveillance in their workplace, they know their chances of getting caught are much greater.
Detecting Employee Theft
This will vary on what type of business you have. If you own a retail business, you may see inventory missing and not counted for. Other signs are a lot of “no sales” on the register, drawers consistently coming up short (or over) at the end of a shift, and frequent voids. Another tip-off is if customers come into your business that will only shop when a certain employee is there. This could mean that unauthorized discounts or free products are being given to favorite customers.
In other businesses, not retail, you may find that people are suddenly working late or coming in before everyone else. Especially if the employee has a history of being unambitious or was unhappy with their job. You also may find that they are requesting to work alone more often.
A employee making big purchases that don’t match his/her income like a new car, house or lavish jewelry, could be a sign that they are stealing from you and think you are too unobservant to notice.
If you’ve noticed security cameras malfunctioning or being damaged when certain employees are working, this could also be a sign that you are dealing with employees stealing from work and leads us to ask “how to deal with employee theft?”
How to Handle Theft in the Workplace
If you suspect theft, be absolutely sure and provide evidence before making accusations or firing them. Jumping the gun without backup could land you in legal trouble. Security camera video is best, but if you have witnesses to the theft, that is also helpful. Other forms of proof might be sitting in emails, files, and documents.
With that said, be sure you’re documenting everything. Acquiring legal help is also advisable. Knowing and following legalities beforehand will save you an even bigger headache, especially if you’re dealing with union workers. Furthermore, check the state laws concerning your right to deduct money from the suspected employee’s final paycheck.
You’ll also want to keep this information to yourself. Telling the whole office about the theft or belittling therm could result in a defamation of character lawsuit. Be the bigger person and let them pay their consequences. if you have employee theft insurance, you will need to file a police report if filing a claim.
None of this is pleasant and we don’t ever want to think someone we trust would betray us, but having systems in place can at least prepare us for it.