As an entrepreneur, you have a responsibility to protect your company against threats that might harm your business, but an internal risk isn’t easy to predict. The concept of employee theft has been around for ages and is still one of the most devastating issues facing many companies today – both big and small businesses.
Employee theft comes in many forms and sizes. Some steal cash, products, clients, processes, and, believe it or not, even information. Regardless of your industry, stealing is a major peril that if not addressed immediately, might put your business in danger. Check out these top security measures on how to stop employee theft.
Is employee theft common?
Regardless if you hired an employee two days, two years, or even 10 years ago, keep in mind that there’s no specific profile for workers who are prone to commit theft. The people who have been working with you for the longest time could just as easily steal from you as the new hires.
Employee stealing is a widespread problem and it is present in every industry. Banking and financial institutions are vulnerable to theft, as well as retail and service sectors. Business owners must familiarize themselves with the fact that theft comes in different forms. Employees don’t have to steal a product or money for it to be considered as theft. Any company resource, when taken without knowledge, automatically falls in this category.
Furthermore, a big percentage of theft comes from employees in managerial and executive positions, since they have access to more information and resources. Though, any employee with a specific financial need is prone to steal something. It’s important to educate yourself to prevent this crime from happening.
What are the types of employee theft?
Basically, theft can be divided into two major categories – external and internal theft. While external theft is mostly caused by an outside factor such as robbery or break-in, internal, or employee theft, is the biggest contributor of loss to businesses and retailers.
The most common types of employee theft include but not limited to:
- Stealing money
Easy to do and tempting, cash is an obvious trigger for many employees to commit theft. If your business uses cash as a means of payment for goods and services, then you are constantly at risk for this problem. Stealing money comes in many forms such as direct from the cash register or the under-reporting of sales so employees can keep the extra money.
- Stealing products
It doesn’t matter whether you run a big shopping store, a small popup kiosk, or a startup merchandise business; stealing products is a rampant problem to the retail industry. Sellable assets are easy to steal; big items require planning while small ones can easily be pocketed in under a minute. Employees can easily commit such crimes when there’s a lack of supervision or surveillance systems in place.
- Stealing information
If there’s one employee theft that is often overlooked, it’s stealing of business data and information. Customer information, company data, patented documents, trademark ideas, etc. – they too can be taken from your business. This is where Cyber Liability insurance comes in handy- to protect your company from security-related claims like data breaches and loss of digital assets.
What are the signs?
In addition to these tips on how to stop employee theft, you should equip yourself with the proper knowledge to help stop and inhibit workers from stealing. Although it’s not easy to predict who is going to steal, there are telltale signs to look for to prevent employee theft.
A common sign is when an employee stays very late at work or picks up more hours than usual. Likewise, you might notice that there is a shift of interest and he or she suddenly becomes extremely devoted to work.
A change in lifestyle is yet another indication of theft. As the owner, you know their salary and what they can afford. But when they start to live beyond their paycheck flashing designer brands and a fancy lifestyle, there is likely something going on.
As a result of their illegal behavior, they will usually subject themselves to gambling, excessive drinking, use of drugs, and other socially extreme behaviors. You can do background checks to confirm your suspicion.
Another sign is when they start to do moonlighting, exhausting all company resources such as tools, materials, equipment, and other things they can take advantage of.
How to prevent it?
Even before fraud starts, you must take precautionary methods to stop workers from stealing. Here are some ways how to stop employee theft.
Be informed and educate yourself about employee theft including the risk factors, possible signs, and vulnerable opportunities that might lead to stealing. Employees steal due to a variety of reasons, and you must know these motives early on.
Closely supervise your staff, managers, and people behind your business while retaining trust. You don’t need to watch them diligently, but keep an eye on how employees feel and act. Remember that employees still need the freedom to work confidently.
Always secure your data, equipment, tools, and everything confidential to your business. Limit access to files and only grant permission to those who are required to use it. Change passwords often and tighten internal controls.
Regularly perform audits from supplies to financial records. Make sure to verify the accuracy and look for missing money, incorrect data, misrepresentation, and other suspicious documents. You can do annual audits yourself or hire an accountant to help you out.
Choose your employees wisely by screening candidates diligently. Before making a job offer, make sure to review their employment history to know more about their background. Also, establish a good relationship with them to nurture trust and prevent misconduct.