Are your employees stealing from you? We’d all like to believe that we have honest employees, but the statistics say otherwise. According to some estimates, U.S. businesses lose $50 billion a year to employee theft. Another study showed that individual businesses are losing over $1 million each year, on average, to employee theft.
That’s a pretty big chunk of your income, and while you probably can’t avoid theft entirely, it does pay to consider how to reduce employee theft. Why does employee theft happen so frequently, how does it happen, and what are some ideas on how to prevent employee theft?
Why Do Employees Steal?
There are several reasons why employees might steal. Some may feel they are not getting paid enough and that they are merely “supplementing their income.” Others may feel that they are taking an amount so small that the business will not notice but that will make a big difference in their lives, not realizing that such thefts add up. Others may do it because they are unsupervised and it is just too easy — they cannot resist the temptation.
Whatever the reason, the fact is that employees do steal, even if they are otherwise moral people and even if they like you and their job. You don’t necessarily have to fire all of your employees and work on your own or only with family members, and you don’t have to follow every employee around like a hawk, even if such a thing were possible. But you don’t have to let your employees get away with it, either.
How to Know If Your Employees Are Stealing From You
The only way to know for sure if an employee is stealing from you is if you catch them in the act, or if they confess. Nonetheless, there are some telltale signs you may want to look for.
Be wary of employees who come in early and/or stay late. They may simply be diligent employees, but they may also have stumbled onto a way to grab some extra company funds at a time when no one is around. Be especially wary if they are very curious about aspects of the business that have nothing to do with their job, especially financial aspects. Again, it could be genuine interest — but be cognizant of the possibility that it could be something more unsavory.
Employees who show up with luxuries that seem to be beyond their means should also raise a red flag. If you run a small business and your employee is showing up in a new Mercedes, you might want to keep an eye out. If this happens once, it could be a result of diligent savings, a side business paying off or an inheritance, but if they seem to be consistently living beyond their means, you might be subsidizing their lifestyle.
Finally, if there are suspicious payment discrepancies, such as checks not making it to vendors or you receiving less inventory than you thought you paid for, strongly consider that employee theft is at the heart of it.
How to Prevent Employees From Stealing
So, what can you do about it? There are a number of steps you can take to deter stealing among your employees. One way is to institute a system of checks and balances where no single person has control of funds. For example, the person who is authorized to sign checks shouldn’t also be authorized to dispense checks, and vice versa.
Another way to reduce theft is to give some ownership of the business to your employees. Even the smallest amount of stock makes an employee an owner, and employees are much less likely to want to steal from themselves. They just might work harder, too.
An access control system can be a great way to deter theft. If only certain employees have access to sensitive areas that are vulnerable to theft and you have a record of everyone who has been to those areas at specific times, employees are much less likely to think they can get away with anything.
Along the same lines, a good video surveillance system is a great way to keep employees honest. With visible video cameras throughout the facility, it’s like having eyes on your employees all the time, and employees are much less likely to steal if they think they are being watched.
If you need help setting up access control or video surveillance in your business, Wayne Alarm Systems can help. Give us a call now at 781-595-0000 or contact us online for more info!