Employee theft costs American businesses over $50 billion annually, with 75% of employees stealing at least once. Employers can prevent theft by selecting the right employees, informing them of anti-theft procedures, and monitoring systems. Fraud insurance can cover lost income.
According to the US Department of Commerce, employee theft costs American businesses more than $50 billion a year. Seventy-five percent of all employees steal from their employers at least once in their careers, with half of them doing it more than once. Typically, employees who are caught stealing are not the ones you would expect. There are several things you can do to make your employees less likely to steal from you, though nothing is foolproof.
The most important step a business owner or manager can take to prevent theft is selecting the right employee. Run a background check before hiring employees to verify they don’t have a history of theft. Check past employment and ask if employees are eligible to be rehired. Pay attention to the previous employer’s tone of voice when talking about potential employees, as they can only verify employment dates. It is also a good idea for the candidate to take a drug test, as supporting a drug habit is a leading cause of employee theft.
Inform employees of procedures that are in place to prevent employee theft. This means telling employees about the over/under cash register, the cameras pointing at the cash registers and storeroom, the company’s fraud prevention team, and any other internal measures that are taken to prevent theft. Employees who know they can get caught are less likely to try to steal from the company.
Employee theft can occur in any company, despite measures taken to prevent it. The only control an employer has over theft is to decrease the likelihood of it occurring and therefore decrease the amount of lost revenue. To cover lost income from theft, an employer may purchase fraud insurance, also called loyalty bonds. This insurance covers the employer’s loss due to fraud committed for personal gain. More information about this insurance program is available on the Association of Certified Fraud Examiners website.
Staff members who commit employee theft are usually caught due to monitoring systems. Computer systems that keep records of e-mails, instant messages and login information and track keywords are the most efficient. An attempt to access company information from an employee’s home could signal fraud or an attempt to make changes to company records. A keyword search may reveal an attempt to share company information with an outsider. For retail businesses, cameras are still the best method to prevent and capture employee theft.
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