Thousands of businesses around the world are losing billions of dollars annually due to employee theft. In the United States alone, businesses lose an estimated $50 billion per year because of employee theft. Protecting your businesses from theft may be viable against third persons or strangers.
However, protecting your inventory and your items from employees may come as a difficult task. A lot of retail employees are desperate enough to try to steal from their employers. Who will protect you against the people you supposedly should trust?
There are different methods scummy employees do to skim off the top from employers. Up to 5% of the actual revenue gets stolen annually from most aspiring business people. According to the U.S. Chamber of Commerce, 75% of workers admitted to stealing from the companies they worked for through whatever means necessary. The most common employee theft is inventory theft, where employees themselves get a piece of the inventory asset before it gets sold.
These things often go unreported because employees are the ones who are left to supervise the inventory. One of the least known theft devices that go underhand and often go unnoticed is time theft, where employees credit their time for not doing work to the firm they work for. Employee theft comes in all shapes, styles, and sizes. How can we, as business owners, prevent this?
Good Inventory System
For the retail types of stores, ensuring that you have a sound inventory system to support the infrastructure of your store is essential and vital to keep track of everything. Integrating technologically sound systems to account for every piece of inventory is critical to hold employees accountable. Making them responsible for a particular set of inventory will encourage them to take care of their items.
A sound inventory system also keeps track of what comes in and what comes out of your store. Keep your inventory as if every piece of it is a unique, expensive item. One of the remarkable inventory systems across multiple industries is a jewelry store inventory system. Jewelry store inventory systems have two sets of inventory systems. One is an inventory that holds and accounts for those jewelry pieces taken out of the vault. The other is an inventory system that accounts for those that stay on display and are bought out.
Different managers are in charge of inventories so that both managers can counter-check the inventory against each other. If a particular 2-carat diamond stone or a braided diamond engagement ring gets taken out for display from the vault, both managers can take this fact into account. A sound inventory system can take into account at what time a specific item got lost.
Surprise Security Checks
Doing surprise security checks to your employees is now a standard in different retail and manufacturing industries. Surprise security checks involve a periodic yet random viewing of what a particular employee has in possession of. It also usually consists of the spot checking of the cash registry, where the magic sometimes happens.
Even the most trustworthy employees are often caught with their pants down when random spot checks are conducted. Keep them honest and on their toes to set things right. If there are no reasonable grounds to suspect any theft, then the security check should not be a bother.
Streamlining the entire process of receiving supplies and selling the inventory should be prioritized to avoid problems about keeping track. Basic accounting principles dictate various ways on how to account for your inventory. Streamlining your processes can also grant you some cushion in your inventory at times when your business is immediately (and mysteriously) running out of a specific stock.
To be proactive about the problem of theft, you can also consider increasing your employees’ wages. One of the tried and tested proactive policies you can institute is to increase your employees’ salaries. According to studies, paying workers and employees more is inversely related to the rate of theft — the more you pay your employees, the less they are more inclined to steal from their workplace. Wages can buy honesty.
It also increases the motivation your employees have in working for you. Maintaining a healthy relationship with them will benefit you both and will likely decrease the incidence of theft in the workplace.
Unfortunately, thieving and pilferage are so prevalent across multiple industries that they are always expected. Handling them is already part of business costs. Becoming prepared for such scenarios is expected for anyone who wishes to become a successful businessman.