How to Prevent Employee Theft

The cost of employee theft and embezzlement costs billions of dollars a year. Losses from employee theft are the cause of one third of all business failures. Three ways to reduce theft are improved security, keeping employees satisfied, and knowing about the scams that thieves use.

1) Improved security measures

Always perform background checks, drug testing, and contact the references of new employees. Sometimes people will apply for a job even if they have a shady past or use illegal drugs. They know that, while places say that they will check, often most places do not follow through. Also, their references might slip up and tell you something negative about the person. It is worth a few minutes on the phone to save you the problems that a bad employee might bring to your company.

Always have at least two employees work together. When an employee works alone, people that they know tend to visit them on the job. Even if your employee is usually an honest person, they can be put into an awkward position when a friend attempts to steal and take advantage of them working alone.

Have employees check each other's bags before they leave. If the business has security guards, they could be the ones who are responsible for checking the employees as they come and go. Video surveillance is a great way to keep everyone honest. All of the entrances and the places with low visibility should be monitored with cameras.

If employees are accountable for their cash transactions, such as them having their own cash till, it helps to prevent the theft of money. For this to work, someone else would perform a drawer audit after their shift.

2) Keep employees happy

The underpaid employee may feel entitled to steal; anything from money to trash bags may go missing. Not paying the employees enough may cause them financial hardship, causing them to choose between stealing and paying their bills. Consider giving an advance to an employee who is having financial troubles.

It is hard on employees to work a schedule that varies dramatically each week. Going from twenty-five hours a week to five hours can cause financial problems if they don't know what hours to expect. The schedule doesn't have to be the same each week, but not having such a wide gap allows the employee to know what they will make and be able to live within a budget.

When employees feel like they are a part of the business, that its success is their success, they are more likely not to steal. Giving the employee stock options is a great way to make them feel like they are a part of the business.

Other ways to have happy employees is to have a relaxed dress code, nice benefits package, and decent working conditions. Also, giving employees a reasonable discount will lessen the possibility of them stealing.

3) Know about the different types of theft scams

Hiding receipts, forging receipts, overcharging customers, over billing expense accounts, and tons more are schemes that employees use to steal. By learning the tricks of the trade, you can then prevent theft.