Mitigating and Managing Employee Theft

A majority of employees admit to stealing from their employer at least once in their lifetime. The loss from employee theft can be damaging to any company and can be particularly painful for small businesses.

Employee theft isn’t exactly inevitable, however. Steps can be taken to prevent theft or mitigate the frequency of it. When theft does occur, the way it’s managed can also prevent future theft.

Understand Different Types of Theft

The first step to preventing theft is to understand the different types. Stealing money or merchandise may be obvious forms of theft, but employees may become more devious and skim from accounts or void transactions to cover their tracks. Employees may also “steal time” by altering their in and out times.

Be Aware of Theft Signs

Missing inventory and office supplies are noticeable signs of theft. A drop in profits may be a more subtle sign of theft that will take some investigation to link. Poor labor ratios may help to identify time theft.

Employee behavior may indicate theft, as well. If certain employees are suddenly interested in staying late or coming in early, they may be finding opportunity to steal when no one is around. Employees whose lifestyles don’t fit their wages may also be stealing to fund luxuries or addictions.

Hire Carefully

Stringent hiring standards may help to prevent thieves from infiltrating your work force. Making sure there is no history of theft via a criminal background check may help you to weed out some thieves. Speaking with previous employers and references may also help you to identify warning signs of dishonesty.

Make Theft Undesirable

Strict punishments can help to deter would-be thieves, but they can also make thieves get more creative with covering their tracks. You can make theft undesirable in other ways, such as making wages very attractive and ensuring employees’ needs are met. Employees that are happy with their employer are less likely to steal.

Offering employees free or reduced merchandise may help to prevent inventory theft. If employees simply have to ask for merchandise or pay a small portion of the regular price for it, they will be less likely to risk stealing.

Install and Implement Security Measures

Implementing inventory procedures and other tracking measures can help with spotting theft quickly. Cameras and computer monitoring will keep employers on the up and up with employee actions and suspicious activity. Regular financial audits and cash controls can help to identify and prevent theft problems.

Be Consistent with Consequences

Having policies in place to address theft consequences can be a disincentive to stealing, especially if employees are educated about these policies from the very beginning. If an employee does steal, it’s important to be consistent with following through on established consequences. If employees feel that they will be able to get away with stealing or suffer lesser consequences, they may feel the risk is worth it.

Employees steal for many different reasons and theft can manifest in different forms. Being aware of signs and taking steps to prevent and address each type can help to keep your inventory and supplies on the shelves and your cash flowing to the bottom line.

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