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How to Prevent Employee Theft

It’s every business-owner’s goal to hire qualified, enthusiastic people who are invested in the company’s success. And many business-owners pride themselves on the wonderful team they have gathered to help propel the business to even greater success.

Now, we don’t want to darken anyone’s rosy outlook—but we would like to remind all those business-owners and operators out there to take steps to protect their businesses from employee theft.

Loss of retail product due to theft and other causes costs US retailers approximately $42 billion annually—and employee theft accounts for 43 percent of lost revenue (about $18 billion). That’s bad enough—but outright theft is only part of the problem. Document forgery, embezzlement, fraud—none of these are rareties in the workplace, we’re sorry to say. 

So how can you protect your business from employee dishonesty?

Follow Established Hiring Practices

Start with making sure you’re really hiring the best people—not just the best-qualified people.

  • Verify all information on the employee application.
  • Contact all personal and professional references listed on an application.
  • Consider running a credit check.

Discourage Employee Theft

Next step: make sure your team understands that employee dishonesty is taken very seriously. Create a written policy clearly outlining employee responsibilities, standards of honesty, and general security procedures and consequences for not following them. All employees should read it, understand it, and sign it as a condition of employment.

Then you need to take steps to reduce temptation and opportunity.

  • Keep accurate records on cash flow, inventory, equipment, and supplies. Establish a fail-safe system by having these records checked regularly by an employee other than the one who maintains them.
  • Limit employee access to keys, the safe, computerized records, and alarm codes.
  • Engrave “DO NOT DUPLICATE” on office keys.
  • Change locks and access codes when an employee is terminated.
  • If employee theft is discovered, take action quickly. Contact local law enforcement agency to send a message to your employees that theft will not be tolerated.
  • Reward employees for uncovering security problems.

Your workforce is a team, working together with the goal of helping the company to succeed—and reaching their own individual successes at the same time. Reducing employee honesty will help every member of your staff, as well as the business itself, to thrive for the long run.

For more than 25 years, Beall Financial and Insurance Services, Inc., has been helping corporations and individuals protect their most important assets. The agency’s client base covers a spectrum of businesses that require specialized insurance packages and knowledge. With offices in California and Indiana, Beall Financial and Insurance Services serves clients nationwide.