4 Tips to Prevent Employee Theft in Your Small Business
The statistics are shocking:
* 75 percent of all employees have stolen from their employers at least once.
* $50,000,000,000 is lost to employee theft each year in the US.
* 33 percent of all business bankruptcies are caused by employee theft.
Most of us look out over our team and think nothing but good things about them; however, the numbers point to another reality. And even if we believe that we’ve done our due diligence and pulled together a crew of good, honest, hardworking men and women, we can’t bury our heads in the sand.
Small business owners need to be vigilant. Here are four ways to tighten up your operation and help prevent theft and fraud.
1. Thoroughly screen applicants
The time to start is before the hire. With that knowledge, you might want to know who is least likely to steal. Women fare better than men — about 41 percent of women steal while almost 60 percent of men are guilty. Also, of all the various educational categories, those with post graduate degrees are the most honest: only 11 percent of that group steals.
So if you’re in a position to hire a staff of women Ph.D.s, you’re in good shape. The rest of us need to do a better job with background checks. Unfortunately, laws regarding pre-employment background checks vary widely. However, there’s no question about references; check them thoroughly. Get solid legal advice about what you can do in your area, write a procedure and stick to it.
2. Make it the culture
Consistently highlight and reinforce your concern about theft and fraud. Starting the first day an employee is hired, communicate your policy. Employee tips are the single biggest way theft is discovered. Make sure you have systems in place so employees can safely report questionable behavior without fear of retaliation.
3. Audit
Implement systems to check up on employees. This means that first you need to keep clear and accurate records. Further, your record keeping system needs to be well designed so people actually use it. Make it too burdensome and even your good employees will start to let things slide.
Stir the pot occasionally. Reassign people so they don’t get so comfortable in a position that they know no one will ever come along and check what they’ve been doing. Cross training is also good for your small business’ flexibility and efficiency.
4. Be sensitive to employee disposition
Disgruntled employees are more likely to steal. They begin to see it as a way to “even the scales.” Also, when employees are struggling under too much pressure, they may lash out at an unresponsive or uncaring management by stealing.
Look for signs that things aren’t right with your employees. The Small Business Administration says to keep your eye out for these red flags:
* A sudden, unexplained change in behavior,
* Financial records sometimes go missing,
* Being overly protective about a workspace,
* Working at times when there is no supervision,
* Unexplained debt, and
* Refusing to take vacations.
If you follow these steps, you can do a lot to help your employees stay among the 25 percent who haven’t stolen from their employers. And that’s good for your business.
