One of the biggest threats to a company’s profit is employee theft. According to the National Federation of Independent Business, an employee is 15x more likely than a non-employee to steal from an employer. In addition, the US Department of Commerce reports that nearly 1/3 of business failures are related to employee theft or fraud.
Employee misdeeds can take many forms, including larceny, skimming, fraudulent disbursements, embezzlement and stealing business opportunities. The following are prevention strategies for business theft:
- Improve candidate screening. Business owners should thoroughly vet all candidates by checking references, performing background checks and conducting online research.
- Monitor retail transactions. Managers should know who has access to cash drawers, cash registers and point-of-sale systems.
- Use an outside auditing firm. Bringing in a third party to review business financial records can make dishonest employees think twice before stealing and provide a second set of eyes to help catch and correct errors.
- Install security measures. Surveillance cameras, access cards or codes, and unique computer login credentials for all employees can deter employee theft.
- Provide a way for employees to report theft or fraud. There should be a secure process for employees to report any co-worker’s wrongdoing without fear of punishment or retaliation.
Employee theft is underreported and likely underestimated by many organizations. However, the threat of employee theft should be taken seriously, and business owners can take preventative action to limit the risk. For more information, contact us via the form below. And be sure to follow us on LinkedIn and like us on Facebook for more industry news and tips!