Employee theft includes downloading and sharing confidential information without the authorization to do so, fraudulently modifying expense reports, or stealing company merchandise.
Whether it is pilfering, larceny, or embezzlement, it all comes down to activities that can be considered fraudulent. Another similarity between them is that they all lead to business losses due to deceit and unlawful activities by an employee.
A recent study by the University of Cincinnati doctoral student Jay Kennedy revealed that 64% of small businesses have experienced employee theft. The stolen goods ranged from cash, products sold by the business, to tools and equipment.
Unfortunately, there have been several cases wherein employees, who are least suspected of carrying out the theft, have turned out to be the culprits.
Here are some effective tips which can help you combat the nuisance of employee theft in your organization.
1. Recruit Wisely
Make sure you pay attention to your recruitment process as this is where it all starts. You need to make sure that at the end of your process, you land yourself new hires that are worthy of your trust.
Before you hire, thoroughly screen the applicants who meet the requirements for the job. Make use of specialized verification agencies for performing a pre-employment background check on them, which should include fact-checking their claims regarding their education, past employment (reason for leaving), references, checking for criminal history and legal violations.
2. Add ‘Zero Tolerance’ to Your Policy
Notify your employees that any attempt of theft on their part will be detected and met with stringent legal action. Make it clear to them that your company has a zero-tolerance policy towards employee theft.
Specify that theft not only includes stealing physical items from the company, but also stealing the company’s time in the form of unapproved and prolonged lunch breaks, falsely reporting sick, and not fulfilling the man-hours stipulated by the company.
Make this a part of the company’s active policy by having it on paper and make your employees aware about it. Let them know that the consequences of theft would result in the involvement of the local police.
Lead by example, by setting yourself and your top management as role models of honesty if you want to curb the fostering of an environment that propagates illegal activities.
3. Audit Your Finances Frequently
Do not hesitate in conducting surprise audits in your organization every now and then. Hire a third-party auditor to have a look at your books once a year. Conducting surprise audits can help you detect theft and fraud before it’s too late.
Audits can also serve as deterrent to other criminal activities as agents of workplace theft often look for opportunities to steal when internal controls are weak.
Audits can also help identify high-risk areas for your business, which could present scope for violations in business expense reports, financial and sales records, abuse of company property, violation of email/social media or Internet-use policies, and so on.
4. Identify the Signs
In order to prevent the occurrence of the untowardly, you need to recognize the signs and work towards foiling the criminal’s nefarious intentions. Some of the signs displayed by a potential thief include:
- Takes very few or no vacations (culprits worry that their antics may get exposed while they are away on vacation)
- Is territorial, overly-guarded, or secretive about his/her workstation
- Would rather work unsupervised. May even work late into the night or take work home
- ‘Loses’ or ‘misplaces’ financial records, at times
- Is found to be in a huge and inexplicable debt
- Shows sudden changes in overall behavioral pattern
Installing surveillance systems in certain locations in the office premises can be extremely helpful in detecting theft, and even catching the thief red-handed. These systems allow you to keep an eye on and monitor the goings-on in the entire organization from a single location, making the security measures convenient and supportive of your cause.
6. Monitor Employee Access
There is a very high probability that you store confidential files in physical and/or electronic form within your office premises. In order to make sure that this data does not fall into wrong hands, you need to limit the number of people who can access it.
Apart from that, you also need to be aware of who is authorized to access it, and what the passkeys/codes are.
Do update and strengthen your cyber security from time to time as well.
7. Secure Petty Cash
Make sure you do not keep large amounts of loose cash in the office. You can keep petty cash, but ensure that the cash-handling is recorded in a fool-proof manner. There is software that can be installed for this purpose.
Avoid letting a single individual handle and control the company’s finances. Do not make one particular employee responsible for both recording as well as processing transactions, as that opens up opportunities which may tempt him to steal from the company.
8. Create a Positive Work Environment
Fair and transparent practices, a clear organizational structure, open communication between management and employees, and recognition-and-reward programs will inspire employees to follow organizational policies and procedures, and act in the best interest of the company. This, in turn, will reduce the probability of internal fraud and theft.
It is implicit that no employer wants to find himself in a situation where he has to deal with employee theft. It breaks relationships and trust, and hurts the company. It is said that prevention is better than cure. If this principle holds true, then the best way of dealing with the problem of employee theft is to prevent it. The above tips should go a long way in helping you deter it in your organization.
Author: Richard Davis is a Content Manager for A1securitycameras.com, a leading provider of security camera systems. He is a man of many parts; apart from creating interesting well-researched content