How to Handle Employee Theft
The small business owner may not realize how detrimental employee theft can be over time. According to the US Department of Commerce, or DOC, employee theft is a $50 billion dollar annual business. That $50 billion includes large corporations but to the small business owner, even a few thousand dollars in cash, information or inventory can be hard to overcome. To control employee theft in your business, implement the following:
Security Cameras - Installing security cameras is not illegal and only violates an employee's rights if they are not informed they are being filmed or if cameras are installed in places that are considered private such as bathrooms or changing areas.
Written Policies - Your employee handbook should contain a clause on employee theft. The policy should be something an employee must read, understand, and sign. Further, the policy should state you have a zero tolerance policy on employee theft and if committed, termination will immediately follow.
Hire the Right Employees - Most job applications today include a statement informing prospective employees that before an offer of employment, you, as the employer, can run background and credit checks on the employee before you offer them the job. Keep in mind that if your job application allows this clause, point it out to the prospective employee and have them sign it. Background checks may reveal if someone has committed employee theft in the past. Hiring reliable employees is key in preventing employee theft.
Internal Controls - Setting up some internal controls can sway employee theft. Let your employees know that you will perform routine audits on anything that has to do with inventory, cash or confidential documents and information. If employees know their department will be audited, they will be less likely to commit employee theft.
Access - Limit access to bank accounts and cash to only a few people or split the responsibility between a few people who you trust.
Support - Offer employee credit counseling services, especially if you see an employee in financial distress. Most cities and towns have economic development centers where retired financial experts offer free debt advice so this service may cost you nothing.
Be Consistent - If you catch one employee stealing and immediately terminate them, make sure you are consistent with future employee theft.
Many law enforcement officers will not help you handle employee theft. As a car dealer, even when an employee took a vehicle from my used car lot and kept it, the local police told me it was a civil matter. Check with law enforcement officials in your area on how they handle employee theft and suggestions on how to prevent it.
Continue to Page 2 to read more Tips on Preventing Employee Theft.