If you own a business and you’ve begun to hire employees, it’s time to start worrying about employee theft, if only because there are some issues you should contemplate before serious problems arise.
The long and the short is that employee theft is rampant by most standards, amounting to $50 billion in annual losses for U.S. businesses, according to CPApowered.org.
Maybe you don’t mind an employee adding five or 10 minutes on a time card. That’s a different problem for a corporation with tens of thousands of employees, like Walmart, which has 2.2 million employees. In that case, everyone padding their time card adds up to big dollars lost on the bottom line.
Your first employee may not be your last, however, so it is also wise to figure out what the culture of your business should be right from the start.
Of course, it is universally agreed that the best way to deal with employee theft is to prevent the theft in the first place and he second step is to find it and stop it as soon as possible.
Here in broad categories are five suggestions for preventing theft:
First, set the right tone from the start.
This entails treating your employees and your customers honestly and making it clear that’s what you expect of them. After that, keep lines of communication open. It is much harder for someone to steal from someone they consider on their side than from someone they consider and adversary. That means teamwork, mutual respect, open lines of communication go a long way towards preventing theft.
Second, keep a sharp eye on inventory.
It is essential that you keep an eye on inventory and transactions in a manner that is visible to your employees. Make very obvious that inventory is done and even done at random times, at least on occasion.
Inventory also includes reconciling your books and for this it is wise to either consult a reputable CPA (certified public accountant) or to ask one how to proceed properly. A suggested starting point for advise might be the American Institute of Certified Public Accountants.
Almost by definition, audits are done by someone outside of the company. Writers do not edit themselves for the same reason audits are done by outside parties. You need a fresh set of eyes to look at your financial records objectively. Rather than fearing audits, consider them part of your arsenal for keeping everybody honest, including yourself.
Third, modern times call for modern measures.
In this day and age, there are numerous high tech tools that can help a businessman keep an eye on inventory and on employees.
You can go as far as having records stored in an outside account – in a cloud server off site – if you are worried your data might be hacked. Remember some employees rob from you and others rob from customers, who may not be able to trace the theft back to your businesses. In that case, you may need to have data encrypted.
High-tech suggestions also include internet-based digital cameras that can keep an eye on cash registers, time clocks and break rooms. There are also electronic inventory systems that make it far easier and less expensive to tally up your inventory. That means you can do inventory more often. Remember, that’s a huge step, because quick reactions to theft are far more effective than slow ones.
Fourth step, background checks and references.
Background checks are considered a key part of the anti-theft strategy for many businesses, but this, again, has a lot o do with how small or large the business might be. If you are afraid of someone drinking on the job, for example, then you might have a very different strategy if you are working with that employee day to day, hour to hour, compared to an employee who works off site, while you work in the front office.
If you don’t want to conduct a criminal background check or force an employee to take a drug test, at least take the simple precaution of calling references. Make sure you get solid information from references that can help you screen out the bad apples. Or, if you want to go
Fifth step, keep a eye on changes in behavior.
You don’t usually catch them in the act the first time, but if an employee’s behavior changes at work or at home, then you should begin to keep a closer eye on them at strategic times.
Yes, spying on your employees is an odd thing to do. But it’s your business and you need to guard it against theft and protect it. Short of hiring a guard, you have to watch your employees yourself one way or another.