The U.S. Chamber of Commerce reports that employee theft costs businesses — large and small — as much as $50 billion a year. This can be even more dramatic for small businesses. The Chamber reports that 30 percent of small business failures are caused by employee theft.
Theft mostly occurs in two categories: tangible and intangible items, according to Human Resources Executive, a publication that covers management, benefits, healthcare training, employment law and other human resources issues.
Tangible theft includes the company’s inventory such as parts or products, or the items the employer has to conduct business such as postage stamps, ink pens, notepads and envelopes.
Intangible theft includes money, time and information, many times through electronic means or by manipulating company information to steal money.
Human resources experts say it’s best to be prepared and to have policies in place and to have regular checks in place to monitor for such behavior:
• Look at your business. What conditions allow for theft? Are employees left alone with equipment or inventory? What system do you have in place for keeping track of products? What oversight do employees have? This is a good time to review company accounts, bills and statements to reveal inconsistences, according to the Small Business Chronicle. Conduct regular audits to look for signs of theft and as a preventative measure.
• Enhance your security and oversight. This could range from having employees work together in teams to installing surveillance cameras. There can be more upfront costs associated with security cameras, but they could save you money with your insurance. It will help protect you from both employee and customer theft.
• Motivate employees. Do you give your employees incentives to work harder beyond what they need to earn their paycheck? Do they feel rewarded within their job? Are they bored? Recognize what each individual does well and utilize those skills in some capacity within your business.
• Be honest. If you think equipment or product is disappearing, meet with employees. Tell them your concerns, as well as how this affects your business. Let them know that their trustworthiness is an important component to the success of the operation as a whole.
If you’re late to the game and already suspect theft is occurring, gather all of the facts you need and thoroughly investigate the issue. This includes bank statements, emails and check registers, time cards and security camera footage. It important to not accuse employees without proof because this could result in legal consequences.
You can consult expert advice from a security firm about setting up surveillance, your insurance agent for tips on how to file claims, and the police department for suggestions about how to proceed, as well as crime prevention tips. ♦
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