Some weeks ago, I shared a dream with my friend regarding a major theft that took place in his workplace. Two weeks after, it happened.
Three colleagues ganged up to steal from the company’s store on a Sunday.
They were caught while trying to move the stolen item through the collapsed fence in the premises. They were handed over to the police and sacked immediately.
The most unfortunate part is that it was not their first time of stealing the company’s’ properties.
Kingsley, the dreamer. Right?
I was in a popular supermarket at Akure. Despite the CCTV cameras present, the employer still searched the staff at the exit door.
Yet, some of the employees still devised a strategy to steal some items from the supermarket.
Imagine hiring an attendant in your poultry who steals one crate of egg every day. That is, approximately, ₦730,000 lost annually (at the rate of ₦2,000 per crate). This amount may be equivalent to a staff’s annual salary.
My barber once told me that his apprentice often diverted some of his customers to himself. Sometimes, he takes them to his house to have their haircut and other times, he offers home service to these customers.
There are so many thefts that happens at the point-of-sale. There are petrol attendants who liaise with their family and friends to ‘buy’ petrol for free.
Some employees do not only steal your money, properties and products, they also steal time. E shock you?
Some employees manipulate the timekeeping data or do not work during office hours such that they are paid for not working.
Some employees may steal a vital confidential information such as your company’s product designs, client lists, business plans, banking details, customer contact information for personal use or sell to a competitor.
Your employee can forge the signature of persons authorized to make and process cheque payments or may set up fake accounts as vendors and bill the company to pay those accounts for nonexistent deliveries.
An employee may request reimbursement from the company for expenses that were not actually incurred.
When these ‘small’ thefts add up, they can lead to financial losses that can ruin your business eventually. Better Business Bureau reports that 30 percent of business fail due to embezzlement and employee theft.
Some employers have gotten used to employee theft to the extent that they even anticipate minimal theft in their businesses. “I’m not saying my employees should not steal from me, I don’t just want them to overdo it.”
Employee theft is a sad reality that you will always encounter as a business owner. About two-third of businesses owners experience employee theft. In fact, 10 percent of employees look for ways to steal from their employers.
Individual motives such as greed, financial hardship, addictions, unexpected bills and revenge against employer can cause an employee to steal.
A business without a structure can create opportunities for employee theft. Weak financial controls and cash management processes may open a chance for employee theft.
Some employees may justify theft with excuses such as “the business won’t notice,” “other people do it.” Some employees even steal because they believe they are entitled to a higher pay.
You have to think like a thief to be able to predict and devise creative tips to help you reduce stealing in your business without being invasive or make you employees feel like you do not trust them.
- Keep proper records
You should ensure that you keep record of every sale, expenses and inventories as often as possible. This will help you to know the state of your business with an earthworm’s view.
Regular, random and unannounced inventory audit will help you detect suspicious activities. There is inventory management software that can of help.
If you sell in bulk or store items for long periods, your warehouse workers may be tempted to steal some of these items.
An accurate business record will show you the quantity of items supplied, sold, refunded and remaining.
2. Go cashless (if possible)
You should make sure that nobody controls too many parts of your business finances. Going cashless may not come so easy for you, but it will be so helpful if you can.
If you cannot go cashless, then ensure that the person who prepares purchase orders, receives cash, issues receipts is not the same person selling to customers.
3. Monitor transactions closely
There is a greater chance that your employee may be tempted to steal if left alone for a long period.
Sometimes, you need to actively participate and supervise some transactions that happen daily in your business. Having a supervisor or manager is not an excuse to be absent always from your business.
However, you must understand that there is a thin line between monitoring and breaching the privacy of an employee.
4. Offer discounts and incentives
If you own a restaurant, try to offer your employees at least one meal for every shift as a form of incentive.
This will prevent them from stealing from you. Whatever business you do, give incentives or discounts to your employees.
5. Pay salaries early
Overworked and underpaid employees are potential thieves in your business. In one company, the HR Manager discovered that theft was common whenever employees were owed salaries.
Financial hardship can desperately push even your most trusted employee to steal from you.
Don’t just pay salaries early, pay quality salaries (above average), if you don’t want your best employees to lose their moral values to hunger and desperation.
6. Create checks and balances
Give your employee the liberty and authority to do his job but don’t give one employee a sole control over an aspect of your business without a backup.
For instance, your accountant may steal for years, knowing that no one else closely goes through the accounting book.
Learn to split major tasks among different employees. Whenever you pair your employees for shifts, do not pair close friends together.
When you assume that every employee is a potential thief, you put controls and preventive measures in place. Some decisions should be made by collaboration of two people only.
7. Be at alert
When you trust your employees too much, you may close your eyes and turn deaf ears to the handwritings on the wall. You may be blind to their secret moves.
Sometimes, the thieves among your employees are those you see as the heroes in your businesses.
For instance, if your employee suddenly becomes defensive, it is time to be keep a close watch on him. Be at alert whenever you observe an unexplained drop in sales.
Be at alert when you observe sudden punctuality or late closing. Be at alert when an employee becomes possessive about others using their workspace. Be at alert when your employee becomes reluctant to take vacations.
Be at alert when you observe an expensive lifestyle well above the salary level.
Keep an eye on trash removal. This is the cleverest place where some employees hide stolen products.
8. Hire with recommendations
There are some roles where you need to hire based on recommendations, referrals and guarantors. An employee who have had theft cases in his previous workplace will most likely steal from you too.
Do unbiased background checks before you hire some employees. Hire attitudes and train skills, not the other way round.
This is not a perfect process because looking into a person’s past may not reveal all you need to know. That an employee has no record of theft does not mean he won’t steal from you.
However, a simple investigation into a person’s past can give some degree of peacefulness when hiring an employee.
9. Have an anonymous report system
An employee is less likely to steal if he knows that others will report him. You should have a policy in your business where employees can anonymously report suspicious activities via phone, email or text.
This should be carefully done to avoid signaling you don’t trust your employees.
10. Install CCTV cameras
CCTV cameras create fear in some employees who have ulterior motives. It prevents theft before it happens.
However, these cameras should be placed in strategic positions only. Bathrooms and break rooms are private locations in your business vicinity.
There are some surveillance cameras that you can pair with a mobile app so that you can monitor your business wherever you are.
Other cameras are able to detect motion and can alert you if someone is inside the premises when the business is closed.
11. Develop a solid relationship with your employees
Dictator parents breed liars. Dictator leaders breed eye-service followers. Dictator employers breed frustrated employees who eventually steal without remorse.
Frustrated employees who care about their salaries more than the success of your business are more likely to steal from you.
Almost all employees hate their employers. It is a continuous war in the workplace across the world. Nevertheless, employers should try to create a work environment where employees are happy most of the time.
Happy employees who genuinely love and respect their employers are less likely to steal.
One of the ways employers show empathy to an employee experiencing a financial constraint is by helping them (if you can) to find solutions that will dissuade them from stealing.
12. Deal with the scapegoat
When your employees know from the onset that they will be fired without a second chance if they are caught stealing, they will think twice before perpetrating a theft. Put in writing and let your employees sign.
When you catch an employee stealing from your business, no matter how small the theft and no matter your personal relationship with him, do not pardon. Have a zero-tolerance for theft.
Don’t underestimate the abilities of a ‘small’ thief. I have personally discovered that it is almost impossible to tame a thief. What you tolerate, will continue. When you take a serious legal action, it will serve as a deterrent for others.
However, be very careful about conducting investigations to verify suspicions and making false accusations that may tarnish the image of your employee, if they turn out not guilty. It can also have a legal implication for you and your company.
Hey! You must bear in mind that this post is not about eliminating employee theft completely, rather it is about reducing it to the barest minimum.
This is because no matter how nice or smart you are; you may never be smarter than some thieves.
In conclusion, you must lead by example by ensuring that you are not the one showing your employees how to steal.
Deal with every business transaction with integrity and transparency. Your employees are learning from you.
© Kingsley Ndimele
Your Reliable Consultant