U.S. Small Business Administration (SBA), “studies show that occupational fraud now results in the loss of five percent of an organization’s annual revenue.”
According to the National White Collar Crime Center (NW3C), “Theft by employees is one of the most prevalent and costly problems faced by today’s business organizations, either private or public. It includes, but is not limited to, “the removal of products, supplies, materials, funds, data, information, or intellectual property.”
The NW3C explains, “the ways that an employee can steal from an organization depend on a number of factors, including that type of money or properties that have been entrusted to the individual, and the access to company funds that the individual might be allowed because of their position.”
However, there are ways that a small business can minimize the theft of intellectual and physical property. Taking some, or all, of the three measures below can potentially save your company money and raise your organizational efficiency score.
Minimize risk exposure.
One way to reduce employee theft is to screen potential candidates thoroughly before they’re hired. Those who embezzle or pilfer office supplies often have a history of it.
To ensure that this process is working properly the application form has to be comprehensive and up-to-date and the interview process has to be thorough. Employee background checks are especially important for potential employees that will be handling high-value products or will have access to the company’s financial records.
Standardize policies and procedures.
Theft prevention should be part of the orientation process. The definition of what employee theft is should be presented in the broadest sense possible. Once policies and guidelines are established, employees should be made aware that following the guidelines is essential to their success within your organization.
Offer incentives to employees that model the behavior most beneficial to the success of the company. Performance reviews are the other end of the conversation. Sadly, many small companies don’t make time for them. There are employees who don’t think about meeting performance standards until the moment before they have one.
Keeping your company cohesive and motivating your employees to make ethical decisions should be an ongoing process. If staff believes they work for an organization without a core mission or sense of community, they tend to act impulsively and lack an emotional connection to the office around them.
In the retail industry, point of sale technology captures valuable information about customers. It can also, however, go a long way to discourage employee theft. Innovative managers may consider using their POS system to match employee hours with specific sales trends.
If items begin to vanish during a particular shift but weren’t entered in the system as a transaction, the manager can easily investigate what happened. Outside the retail industry, theft of physical property may be less of a concern. Still, a recent survey has shown that business supplies such as bond paper, staplers and scissors routinely end up in the homes of employees.
In addition, in some instances monitoring employee emails can’t be emphasized enough. There’s always the possibility that an employees in a sensitive area of your company such as sales could possibly steal in-house data and client information to set up their own competing businesses.
Of course, the ideal objective is not to treat employees like suspected criminals. The best way to create a work environment that’s built on mutual respect and trust is to provide incentives for good behavior. Offering bonuses and perks such as extra vacation days for following protocol can keep the relationship between the company and the staff positive.
Zoe Maldonado is a blogger for TechBreach who enjoys writing about all things mobile and electronic and spending time with her very active twin boys.
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