Some questions can be unpleasant. One issue some business owners must face even though it is painful is employee theft. Every business, whether small or large, can take steps to minimize (or, with luck, eliminate) this aggravating problem. Police data indicates that more than two-thirds of retail theft is committed by employees. Security experts report that over 30 percent of all employees steal from their employers. How can one address this?
The first step is to carefully screen all applicants before they are hired. It’s easy to say yes when Joe suggests his cousin’s nephew. Joe’s a great employee, but that doesn’t make a distant relative an immediate winner. A background check (which should include a check of police records) will drag most skeletons out of the closet. It will tell you about credit problems (which are often a factor in an employee’s decision to supplement his income), behavioral problems (like several DUIs), and other items that could be important to you. You should also ask an applicant for their employment history. Call previous employers, but be aware of this: most employers are afraid (because of the threat of litigation) to tell the whole truth. A lack of enthusiasm tells you something. Read between the lines. All of these checks will be even more important if the position involves handling money.
Another key is frequent audits of records, both inventory and financial. It is easier to steal stock by adjusting the records than to remove it from the floor. Audits should be periodic, but random and unscheduled. When records are maintained and checked, the incidence of theft and fraud will decrease. It also helps to have two employees check all incoming shipments.
Proper supervision can minimize easy opportunities for employees to steal. Only specified key employees should have keys to the business. Installing time locks and alarms (including motion detectors) can help prevent access outside of proper hours. Employees who steal after hours typically take more than they might while you’re open. There is no one to watch them.
Flatten empty boxes and remove all trash before the end of the business day. This eliminates a reason for employees to make an extra trip to the dumpster after you close. You might also want to have a camera on the area behind the business. Review it frequently. And don’t allow employees to park near your delivery dock.
If you suspect an employee is stealing from you, don’t try to resolve the problem on your own. Involve either your security firm or the local police. Provide them with all the information you have when you contact them. They can’t work simply from your suspicions.
Lastly, consider your own behavior as a model. If you borrow from petty cash or constantly take merchandise home for your own use, employees will begin to think that they too have a right to “borrow” from the business.
If you’d like a review of how well your “anti-theft” systems are working, call your SCORE mentor and have them do a security evaluation. You won’t regret it. It’s one of the many ways in which a SCORE mentor can be valuable to you and your business.