According to data from the US Chamber of Commerce, 75% of employees have admitted to stealing from their employers at least once and 38% admit to stealing from employers at least twice. The FBI refers to employee theft as the fastest growing crime in the U.S. costing businesses about 7% of their expected margins. This information came from www.thebalancecareers.com.
When I came upon this statistic, I found it rather alarming. You know your employees, after all you hired them. You have a business and you believe you would notice if someone was stealing from you. But the questions is, would you really?
What are ways that employees can steal from you?
MONEY: this is the most common thing taken in a business
TIME: this occurs when an employee is paid for time that he/she does not work. If you have timecards, it is common for one employee to punch in/out for another employee. Also another possibility is your route driver. Is he pulling over and taking a nap or running errands on your time?
SUPPLIES: the majority of this would be office supplies – pens, paper, etc. I remember years ago, a dry cleaner telling me that his employees were stealing TOILET PAPER! He had to resort to only having one roll of TP in the bathroom at a time.
MERCHANDISE: in this case, we would be talking about customer clothes. I just got a call a few weeks ago from a dry cleaner who let go an employee. He suspected him of stealing some money. However, once he did an inventory, he discovered several orders were missing. This “disappearance” occurred over many months.
These are just a few of the ways that an employee can steal from your business. There was another case of every time a credit card charge was made, Mary would ring it up twice and pocket the money. I had a drycleaner friend whose book keeper would skim the cash from deposits and just deposit the checks. Currently, not many customers pay with checks or cash for that matter.
Why do employees steal? Because they can! Opportunity presents itself and he/she is not caught so they continue down that road. Obviously, other life experiences create the need – life changes (divorce, separation, illness), racking up credit card bills, addictions.
What can you do to prevent or minimize employee theft? Start with the hiring process. Conduct a background check. This can be done by calling their references. Often ex-employers are vague and hesitant to give any disparaging information. Read between the lines during that call. Confirm dates of employment. If there are lapses in employment, ask the reason why. Give them a good job description. Be clear on what you expect. During this process of hiring, you want to identify any red flags that appear.
Establish a system of checks and balances. It is critical that you do inventory on a regular basis. Once a week might be too cumbersome for you but it needs to be done. I KNOW from experience that it is easy to put this off. The time it takes to accomplish this will save you many future problems. Employees will be aware that inventory is being done and it would be more difficult to remove an order from inventory.
In line with the inventory, you need to have a system for voiding invoices. One person should have the authority to perform this task. This restriction will further lessen the opportunity. Experts suggest establishing a trash routine. As ridiculous as it sounds, employees can sneak things out in the trash that they plan on using themselves.
I am not asking you to act like “big brother.” Many business owners have installed video cameras to keep an eye on things when they are not there. The systems today are very reasonable and easy to install. As www.businesspracticalknowledge.wordpress.com states “general tip to deterring theft in a business: think like a thief.”
Most of your employees are not thieves. I just wanted you to be aware of what could be going on in your business. Keep your employee morale high and treat your employees with respect. They in turn will look after you.