According to the U.S. Department of Commerce, employee fraud or theft is a major consideration in almost a third of business failures. Therefore, it is one of the major concerns small business owners in New York have to deal with. According to a National Retail Federation survey, internal theft costs retailers $1,551.66 on average per instance.
Employees are responsible for an estimated 44% of theft losses at stores, according to the National Federation of Independent Business (NFIB), and they are 15 times more likely to steal from their workplace than a non-employee.
How to identify and deal with employee theft is the key information you should have, so a team of skilled professionals at Linked Security put together a thorough article for employers on how to handle an employee who is stealing. So let’s find out everything you might be interested in!
Types of Employee Theft
Theft by employees can take many different forms. Among the most typical sorts of employee-related crimes are the following:
- Supply theft involves stealing equipment or materials from the workplace without permission. Rummaging through the supply closet in search of pens, staplers, scissors, or computer peripherals may seem like a minor infraction, but the expense of stolen materials quickly piles up.
- Theft of merchandise happens when an employee steals goods from a company for their use or to resell.
- Theft of money happens when an employee takes the money that was entrusted to them to manage or lead the business. Examples include taking cash from customers during transactions or transferring money from the company into a private account.
- Data theft refers to the taking of valuable information, such as strategic planning, client lists, contact details for clients, formulas, recipes, or financial information.
Common Signs of Employee Theft
Employee fraud is frequently detected through obvious indications. Observe these five warning signs:
- A worker’s salary and lifestyle have suddenly diverged: An indication of deception may be when a worker starts to live significantly above their means.
- A worker hides information: It might be an indication of fraud if an employee is very reticent to discuss their workflows or ask for a second opinion on their work.
- You frequently get tipped off or have complaints about a specific employee: Although it might seem obvious, the ACFE reports that tips are responsible for the discovery of 42% of employee fraud instances.
- There have been numerous contradictions in the reports: Unusual increases in expenditures, supplies, or employee reimbursements; excessive or unexplained cash transactions; unreconciled bank account statements; sudden activity in accounts that had been inactive previously can all be signs of fraud. Use an expenditure tracker to keep an eye on the accuracy of employee reimbursements, and examine your company’s accounting reports frequently.
- An employee feels that they are exempt from the regulations: When you have the required internal controls in place but a worker disobeys rules or appropriate procedures, this can raise red flags.
5 Steps to Address Employee Theft
- Give honest conduct a top priority
Employees rate “high ethical and moral standards” as the most crucial quality of successful leaders, according to the Harvard Business Review. This is why you must make integrity one of your core values and come up with inventive methods to continually reiterate moral principles so they become ingrained in your team’s or organization’s culture.
Also, keep in mind that it is not enough for you to simply “walk the talk“; you also need to convey and reinforce the expectation that every member of your team thinks and behaves with high ethical standards.
- Create a theft prevention policy
Collaborate with your lawyer to incorporate a theft prevention policy in your employment contract to make it abundantly obvious that stealing from your company will not be tolerated.
Provide instances of unlawful actions and make sure employees understand that breaking the rule could result in harsh penalties. You might immediately fire the employee, report the incident to the authorities, and possibly pursue a lawsuit to recover any losses.
- Take advantage of video surveillance
Think about setting up security cameras to keep a close check on your company. Employers should be in charge of positioning the cameras so that workers aren’t aware of their blind spots; nevertheless, keep them away from spaces where privacy is expected, including restrooms and break rooms. With the use of cameras and a mobile app, you can keep an eye on your company even when you’re not there.
Motion-activated cameras can even notify you if someone enters the building after hours. Installing an advanced security system may even result in a reduction in your insurance rates, which can help mitigate the expense of additional cameras and technological advancements.
- Integrate video surveillance with an alarm system
Combining video security cameras with alarm systems that can be controlled remotely or automatically will have a greater impact. Whether you want to set up a wireless or hardwired alarm system, Linked Security can incorporate your alarm system into your CCTV and building security.
While sensors that make a loud noise can discourage workers from stealing, silent alarms can be used to notify authorities of the location before the thief is aware that they have been captured. Alarm systems can be monitored by professional security services to ensure the best possible safety for your commercial property.
- Create private channels for reporting theft
According to research, anonymous tips are used to uncover 40% of all cases of workplace theft and fraud, and 50% of those tips originated from company workers (internal audits were the second most common method). Send a message to your staff that they can report suspicious behavior anonymously by providing a phone number, email address, or suggestion box.
Theft by employees can be extremely demoralizing, so as an employer, your primary responsibility should be to think about ways to avoid theft. A definition of what constitutes theft in your employee handbook is a fantastic idea, as is establishing a clear zero-tolerance policy regarding theft at the workplace.
Installing an advanced security system, including security cameras and an alarm system, that is appropriate for your business’s requirements is a further influential step since you can effectively avoid workplace theft by implementing advanced security systems.
Don’t hesitate to contact us right away if you are considering employing an exceptionally qualified team of professionals at Linked Security who will customize a security system exclusively for your commercial property to handle not only employees who are stealing but also solve other concerns, including vandalism and accidents.