Theft is a serious problem that no business should ever ignore. Every year, businesses across the nation lose millions from theft. A huge number of thefts that occur in businesses, unfortunately, involve an employee.
Employee-related crimes are very common. Organizations around the world lose about 5 percent of their revenue to employee-related fraud and occupational abuse annually. Moreover, it takes a really long time — approximately 14 months — before a theft scheme involving an employee is discovered. By then, as you might have guessed, the amount stolen is already significant and has made a dent.
While it is strongly advised that businesses perform a background check on applicants before hiring them, it does not always filter out the bad people. Only 4 percent of thieves have previous fraud convictions.
It can happen to your business. The people you trust may steal from you when you are not looking.
To Catch Employee Theft
There are multiple ways an employee can be involved in a crime.
Many think that bringing home random bits and pieces is okay but it still counts as theft. A single pen or notebook would not cost the company much but, wait a year. If the behavior continues, the cost will rack up.
Petty theft is not easy to detect because no organization keeps track of small items. However, you can minimize it.
Communicate an anti-theft policy that makes it clear what actions are considered theft. It also helps to have commercial security alarm systems installed around the premises to discourage wrongful acts.
Meanwhile, cash larceny is one of the most common types of employee-related theft. An employee might alter cash accounts, alter the register tape, or steal directly from the cash register.
It is easier to detect by separating staff duties to make it easier to monitor activities and by conducting surprise cash counts. That way, you can minimize losses in case theft happens.
There are other ways an employee might steal from an organization. The question now is, how should you handle it?
Are you Sure?
Before you do anything, you should make sure that your suspicions are correct and can be substantiated. Making false accusations is not just embarrassing. It can impact your business badly. One, it can lower the morale of your entire team, decreasing productivity. Second, it can end in a lawsuit.
Employees can sue if an allegation was made that damaged their reputation, especially if it has prevented them from pursuing another job. As you might have imagined, the situation will be very costly and it will take too much of your time.
Before taking an action, gather as much evidence as you can. You can speak to a person you trust who is not involved in the theft to investigate on your behalf.
Take Immediate Actions to Protect Your Business
Once you have all the necessary data, you can take the first step. Protect your business. If the employee involved in fraud is handling your finances, then it is time to cancel credit cards and lock bank accounts. You should also change the passwords of online financial accounts and email addresses. Doing so prevents them from further carrying out the scheme.
Decide What to Do with the Employee
Emotions run high when you realize that you have been betrayed. Once you have taken actions to protect your business, you can take a pause and think about how you will proceed. It is best to discuss the situation with other managers before deciding on a punishment on your own.
Of course, most people would want to sue but it is not always the best course of action. Litigation would be expensive and time-consuming. You would have to gather more evidence, file reports, and then report it to the proper authorities. You might end up spending more time and energy compared to what has been stolen from your business.
Aside from firing an erring employee, you can ask that they bring what they have stolen back or repaid its cost in exchange for not bringing them to court.
Figure Out What You Did Wrong
Now that it happened, you can use it as an opportunity to figure out flaws in the system that can make your business vulnerable to fraud. Maybe the convoluted way in which you handle your finances made employee theft easy. Maybe keeping a written inventory instead of digitizing it was not as secure as you thought it was.
Now that you know, you can take the steps to prevent it from happening again.
Businesses lose too much from employee theft. While it is important to trust your crew, you should also protect yourself and your business from becoming a victim of a crime involving employees.