Most business owners and managers would like to believe that employees would never steal from them. After all, if you are at the top of a company, you are probably an honest person.
However, that’s not the reality. According to research by CBS, the average company loses around 5 percent of its revenue to employee fraud. And when you think about it, that’s a huge amount. What’s more, small businesses are affected by theft disproportionately, meaning that the losses can be immense.
So what can you do about it as a business owner. Here are some ideas:
Create A One-Strike Policy
Before employees take work with you, they should know that you operate a one-strike-and-you’re-out policy. Even if they steal just once – and it’s a small amount – they’re gone.
Most retailers and other businesses use this approach. Over the years, they have found it to be the most effective way to prevent theft, even if replacing criminal staff members is expensive.
You should also talk to your employees about how you monitor for fraud. So, for instance, you might want to make it clear from the beginning that you record them on CCTV. CCTV for shops is particularly common.
Improve Your Relationship With Employees
If employees love their work, believe in your mission and like you personally, they are much less likely to steal. They will view themselves as “team players,” committed to the success of the brand. However, if they don’t align with your values and dislike management, they may use that as justification to steal.
Senior partners, executives and managers must be careful. Do whatever it takes to build quality relationships with your staff. If you can’t make it work, then it may actually be better to let somebody go before they damage your company.
Create An Accountability System
You should be able to detect shrinkage no matter how small by comparing your takings to your overall inventory. The two should match exactly. However, if they don’t, it is a sign that somebody is stealing from the company.
In many cases, you will be able to account for losses – damaged or spoiled goods. But if there is a substantial remainder, then it is a clear sign that somebody is taking money from the firm. When this happens, try to create more accountability. Assign employees to individual tills. Keep track of all the money they contain. Always review footage of employees to check that they are behaving honestly.
Stop Relying On Cash
Cash is a big problem for businesses. That’s because it is so easy for employees to steal. All they have to do is put their hands in the cash register and take it out.
However, it is much more difficult for them to steal when you take money via card payments. POS systems automatically shuffle funds around between banks, without any involvement between employees.
The lesson is clear: don’t rely on cash. Minimize cash usage where you can. Encourage customers to make card payments by offering lower limits and minimum spend amounts.