Employee theft robs American businesses of billions of dollars every year. In fact, security experts estimate that as many as 30 percent of all employees engage in some form of theft, be it office supplies, high-end merchandise, machinery or parts.
The first step to preventing pilfering in your business is acknowledging that employee theft is a real threat. The next step is taking action to protect your company.
Implementing a comprehensive employee theft prevention program can:
- Cut inventory losses
- Boost profits
- Reduce employee turnover
- Increase productivity
Start with the hiring processDishonest workers can be disastrous to your business. Create hiring policies that include comprehensive background checks on all potential hires and include honesty testing in the application process.
Identify the signsBe on the lookout for a sudden rise in an employee's living standards, inventory shortages, cash register discrepancies and customer complaints about inconsistencies. Any of these could signify an employee theft problem. Implement an employee awareness program that trains your workers to identify the signs of theft and instructs them how to report it.
Review points of sale proceduresThe cash register is a source of temptation in many businesses. Dishonest employees can create receipts for less than the actual transaction amount and pocket the difference. They can also hide receipts to use for phony returns at a later date, short-change customers and give friends and family generous discounts.
Crime Prevention. The Learn to Stop Employee Theft video from CrimePrevent.com provides additional strategies to protect yourself.
Stop inventory and warehouse shortagesTheft from your warehouse or inventory storage area can cripple your ability to meet customer demand. Implementing an inventory tracking system, performing frequent and unscheduled inventory audits and limiting access to storage areas are some of your best defenses against theft.
Create bookkeeping checks and balancesBookkeeping needs intense scrutiny. To reduce the possibility of theft, have an accountant or supervisor periodically review the bookkeeper's work or divide bookkeeping tasks among several employees.
Monitor your sales floorDon't allow employees to bring handbags or backpacks into the sales area and keep employee lockers and the lounge area away from the sales floor.
Crime Prevention offers strategies to reduce theft from the sales floor.
Keep tabs on expensesIf your employees have an expense account or regularly submit expenses for travel, dining or mileage, there's a possibility of overbilling. Employees may overstate mileage or attempt to get reimbursed for dinners and travel that weren't business-related.
Expense management software, such as Expensable, lets you quickly analyze spending trends and spot inconsistencies.
- Overt anti-theft tactics, such as alarms, may have a negative effect on employee morale.
- Consider implementing a profit-sharing plan so employees have an interest in deterring theft.
- Create a uniform policy regarding the actions to be taken in case of employee theft and make sure everyone is aware of your policy. Enforce the policy for managers as well as new hires.