Employee theft is certainly one of the more disappointing things to experience as a business owner. However, it sadly happens to a lot of businesses. Not every business owner is prepared to deal with it which is why preventing it may be the best course of action. But how do you stop something like that in your business?
Well, it certainly depends on the business but let’s talk about what employee theft really is and what kinds of employee theft there are so we can spot them and fix them.
What is employee theft?
There are a few different types of employee theft but the general idea of employee theft is when an employee steals something whether it be a product, money, or information from their employer. Sadly, about two-thirds of small businesses in the United States are estimated to experience employee theft. What is even more shocking is that one survey stat on employee theft had 75% of employees admitting to stealing from their employers at least once in their lifetime.
This issue is something that really needs to be taken seriously and addressed by any business owner that wants to keep their business safe but also their employees and guests if applicable.
Types of employee theft
We briefly said that there were different types of employee theft. It’s worth understanding all of them in case one of them is happening to you.
Money Theft
Money theft is when the employee takes money such as cash or wire theft from the business. This risk is most prevalent for storefronts or somewhere where products are being sold.
Inventory Theft
This is one the employee takes the product from the company or any other products that belong to the company. This can happen a lot in retail but also can happy at any business.
Services Theft
This is when an employee can abuse any kind of additional services that are offered as a benefit. For instance, if you work in a coffee shop and get a discount on coffee but take more than your allotment this is theft.
Data Theft
If you deal with a technology company there is a lot of data that can be stolen and sold or stolen and brought to a competitor. This is serious theft and can be incredibly damaging to a company.
Time Theft
For jobs that have their employees clock in and clock out, employees can steal time from their employers claiming that they are working when they really are not. This adds up and can be costly.
Expense Reimbursement
When you have an expense account set up employees can keep their receipts and put their expenses such as food and travel on the company. Some companies can get taken advantage of by employees falsely providing receipts for things outside their expenses.
How do you spot employee theft?
To spot employee theft there is a few things that you need to pay attention to. It’s super important to notice changes. For instance, if you have employees that are changing their schedules to stay late or come in early without authorization, this may be a sign that you are dealing with possible employee theft. Another possible issue is if you don’t take care of your inventory logs you may not notice when you have missing products. Using something like surveillance security cameras is a good way to spot this.
Another thing you should notice is who is accessing certain rooms. This is more important for companies that have technical businesses. Access codes make this easier to track which implies that you need an access control system.
How does employee theft affect companies?
Sadly, employee theft can really affect a company. In fact, ⅓ of small businesses in the United Stated declare bankruptcy because of employee theft. This is how big of an impact it can make because it affects the profit and profit margins a lot. As much as $50 billion a year is stolen from employers by their employees each year.
What causes employee theft?
There are many reasons that cause employee theft. While each situation really is individual some of the more common issues such as it’s too easy. If your company makes it easy to steal your products, time, or other issues, some employees will simply do it. But there are other reasons as well such as employees feeling wronged by their employer.
We have seen this example when an employee gets fired and wants to take their work with them. It’s important to understand why your employees are stealing from you in order to correct the situation in the first place.
Ways to prevent employee theft in my business
So now that we have talked about what kinds of employee thefts are and sadly just how common it is, now we really need to understand how we can present it. There are a number of ways to do this that include security systems and other ways.
Security Sytems
Implementing a security system can reduce your risk of employee theft by as much as 300%. This number is huge and can be the reason you don’t have to declare bankruptcy. There are many different kinds of security systems on the market but one of the most important ones to consider would be security cameras. Some employers don’t do this because they think it creates a lack of trust in their employees.
The truth is security cameras are needed and will make an employee think twice about trying to steal a product or even logging time when they really aren’t there. Another type of security system that is worth considering is access control. This allows the head of security or the owner to manage who is coming in and out of the business when they want to. It controls the locking system on all the entries and exits inside and outside of the building. It also allows the employer to track employees’ entrances and exits at different times.
Spruce up Your Hiring
It’s important to not have any sort of racial profiling or bias in your hiring process but you also want to make sure you have a quality HR process that allows you to hire individuals that you know you can trust and have good standing with their past employers. This will reduce your risk of hiring someone that is going to steal from you.
Make Your Consequences Known
Have a strict tolerance policy. You don’t want employers to think that there are no consequences when they steal and it is absolutely a fireable offense. When you make this known employees will think twice about taking advantage of the company they work for.
Employee theft FAQs
Employee theft is something that isn’t commonly talked about despite how common it really is. Because of that, it’s normal for business owners to have questions about the process and what to do if it is occurring to their business. In this section, we will address the most only ask frequent questions about employee theft!
What are the most common punishments for employee theft?
While it is certainly a fireable offense like we mentioned, more serious thefts like embezzlement can be charged as a misdemeanor or even a felony. We have heard of embezzlement at the biggest levels where millions of dollars have been billed to a fake company where an employee is taking the money. These sorts of serious crimes need to be reported to the police and authorities to deal with.
When you catch an employee stealing for the first time and it is a minimal amount of value firing the employee is the most common form of action. You can still alert authorities if you want it to go on the employee’s record.
What are the most common types of employee theft?
Time is the most common type of employee theft because it is sometimes the easiest type of theft to get away with. While an employee may be logging time they may not be productive and doing actual work. This is important to track their performance for the company and see if their hours are truly matching up with the benefits they are bringing the company. This can be both intentional and sometimes unintentional. Monitor your employee progress.
What is Grand Larceny?
Grand larceny is a serious crime in which an employee has taken a large value of $950 or more in property, It’s often referred to as Grand Theft. This is punishable by law and something that needs to be handled by the police rather than internally.
We talked about one course of action that you can take when trying to correct and prevent employee theft in your business is security systems. Here at Circle Security Solutions, we can provide all the tools you need to help eliminate employee theft at your business. Whether you want to look at security cameras to identify possible issues or you want an access control system to ensure door security, we have it all! The most important part is having your security system installed correctly. At Circle Security Solutions we can do this for you!
Don’t Overlook This!
Employee theft is something that sadly gets overlooked by companies in efforts to focus on employee productivity and lead conversion. Sadly, one-third of business bankruptcies can be attributed to employee theft as 75% of employees will admit to stealing from their employer at least once. The most common type of theft we see is the type and when time is overbilled incorrectly an employer can end up paying their employees more than they can afford to.
We can see that there are many other types of theft that employers deal with and that can be handled by implementing a security system such as surveillance cameras and access control systems. Keep in mind that that is not all you should do. You really should also consider being strict with your consequences to show other employees the behavior is not acceptable. For bigger crimes, you should leave this up to authorities instead of handling it internally.
