Written by Angie Mansfield
According to the Australian Federal Police (and reported by LAC Lawyers), 70 per cent of business fraud losses come from staff or former staff. These losses add up to more than $1.5 billion per year. Even a fraction of that number can be a major deal for a small business owner.
So, how do as a business owner detect and handle employee theft?
Here are a few common types of theft, and how you can cut down on your risk:
Theft of Money/Property
One of the most common things stolen in the workplace is money, followed by merchandise and company property.
From a few dollars taken out of coworkers' wallets or purses, to computers and other equipment, an unscrupulous employee may grab whatever he or she can get away with.
An employee may also steal directly from you and customers by overcharging, and pocketing the extra money. This can have a major impact on your business reputation, particularly if customers find out that they're being overcharged.
Other items commonly stolen in the workplace include small electronics such as iPods, tablets, and laptops. Office supplies are another very common target.
The loss of a few pens might not sound like much, but when the thefts move up to flash drives, CDs, or bulk supplies, they can add up to significant losses.
Theft of Time
Another scam frequently used by dishonest employees is claiming extra hours on their time cards. If you're not careful about tracking your workers' time, you may end up paying for hours they didn't actually work.
Clocking in but not doing any work during their shift is also a form of theft by employees, but this one's harder to prove.
You can help prevent it by having clear daily production goals for each employee, so both you and your workers will know what's expected, and what's actually getting done.
Reasons an Employee May Steal
While some dishonest workers will steal simply because they have the opportunity to do so without getting caught, there are a few triggers that may also cause workplace theft.
Preventing Office Theft
Your first step should be to vet all prospective employees carefully.
Many employers, especially small businesses, don't perform adequate background checks before hiring someone and this can lead to problems. A background check and a call to each of the employee's references should become a standard part of your hiring process.
Next, put a clear, zero-tolerance policy in place for theft.
An employee who may be tempted to steal if she thinks there are no repercussions may think twice if she knows she'll lose her job on the spot if caught. You should also make it clear when you hire employees that you will take legal action to recover any losses from employees you catch stealing from you.
Finally, you can protect yourself by providing supervision and keeping organized and detailed records for everything from inventory to payroll.
Installing video surveillance on inventory and cash handling areas provides a major deterrent. Make sure employees don't have access to accounting software or other sensitive programs; keep these password-protected.
Employee theft can put a big dent in your company's profits, but by implementing a few prevention measures you can reduce your risk.
About the Author
Angie Mansfield is a freelance writer covering a range of financial topics important to small business owners, including why you should consider a wireless credit card machine.