Did you know that 75% of employees have stolen from their employers?
With a statistic like this in mind, it’s obvious that preventing employee theft in the workplace should be top-of-mind for employers who care about their companies and want to preserve their resources.
Unfortunately, this is easier said than done. Especially without an HR presence in the workplace. If you’ve ever wondered how you can prevent employee theft in the workplace, here’s your complete guide.
Employee theft, by the numbers
The first step to preventing employee theft is understanding how, when, and why it happens. Here are some numbers to chew on:
- 25% of businesses report having suffered losses of more than $1 million, thanks to employee theft
- Right now, workplace theft costs U.S. businesses an average of $50 billion annually
- About 37.1% of employee theft is committed by a manager
- One out of three retail employees are arrested for internal theft
- 37.5% of employees have stolen at least twice from their employer
- 33% of business bankruptcies are caused by employee theft
- The average amount of money stolen from company to company is about $175,000
Why do employees steal (even from small businesses)?
Once you understand how common employee theft is, it’s also important to consider the motives behind theft and to use these to prevent theft down the road. Here are a few of the most common reasons employees report stealing from their employers:
- Greed or need. This greed can be due to a series of complex circumstances, including unexpected bills, addictions, or financial hardship.
- Simplicity. Some employees steal simply because it’s easy to do so. This is more common in companies with weak financial controls or little oversight.
- Resentment. Employees who feel that they are overdue for a raise or helping their manager get rich may steal because they believe the company won’t notice it, or because they deserve it.
How to Prevent Employee Theft
When it comes to preventing employee theft, there are many different approaches, and no two are the same. Here are some of the most popular and effective for the modern workplace:
- Ensure employees feel important
- Conduct background checks
- Consider using surveillance
- Conduct regular audits
- Show no tolerance
- Consider time theft
1. Make Sure Employees Feel Important
Valued, engaged employees want to uplift their workplace, not harm it. With this in mind, be sure all your employees feel valued. One of the best ways to do this is by offering adequate pay.
According to recent research, employees with higher wages steal less frequently. And this makes sense – employees who aren’t making a living wage will think about theft more often, thanks to an ongoing sense of financial desperation.
Aside from paying employees well, be sure to recognize their accomplishments, provide ample coaching and training, and focus on an employee perks program to make everyone feel valued.
2. Conduct Background Checks
While this won’t insulate you against theft entirely, it’s a good way to weed out employees who are more likely to steal. During the hiring process conduct a background check. This will allow you to spot new hires who have histories of theft or credit issues, and weed them out before they walk through your doors.
3. Consider Surveillance
Surveillance is one of the best security measures to make sure employees aren’t acting dishonorably and to catch any who may.
While many business owners believe surveillance is prohibitively expensive, this doesn’t have to be the case. In fact, many modern surveillance systems cost only a few hundred dollars and are simple enough for anyone to install.
If you do decide to invest in a surveillance system, be sure to place security cameras in high traffic places, like behind the cash register, in your stockrooms and warehouses, and outside your building.
4. Conduct Regular Audits
Of the businesses who catch their companies stealing, 11.8% do so through external audit, while 18.8% do so through an internal audit. With this in mind, be sure you’re conducting regular audits of your company.
Not only will this help you navigate employee theft prevention, but it will allow you to nip the activity in the bud if you do find signs of it.
5. Show no Tolerance
One of the best things you can do for theft prevention is to spell out punishments clearly and plainly in your employee handbook and adopt a no-tolerance policy toward workplace theft.
If employees see you taking a strict and no-nonsense stance on theft with their co-workers, the message will spread throughout the workplace and those at risk of theft may reconsider, understanding fully that they will lose their jobs if caught.
Employee theft isn’t always physical inventory, or office supplies, another common way some workers may “steal” from their employer is by clocking in early or clocking out later from their shifts, or employees clocking in for each other with buddy punching. These few minutes, over the course of the month, can add up — we’ve found it’s about $200 per business location on average.
Fortunately, Homebase can help. With Homebase, you can prevent early clock-ins and avoid time discrepancies, so your employees will only be able to clock in when their shift is about to start. We’ll also send them reminders when their break is about to end, so they can get back to work on time.
Stopping employee theft once and for all
While employee theft is incredibly common, it doesn’t have to be this way. By taking proactive steps to get ahead of and prevent it, you can reduce your rates of theft, at the very least.
If you run a business, chances are you’ll experience employee theft at some point. When you’re aware of that reality, though, you stand a much better chance of making the theft less pronounced, less common, and less acceptable than it might otherwise be.