According to the Association of Certified Fraud Examiners, it takes 18 months to catch an employee who is stealing from the company. During this time, the employee can get away with stealing quite a bit. In fact, the ACFE further reports that the median loss for small businesses due to employee theft was an astounding $154,000 in 2014. While there is no way for you be completely certain that you have eliminated employee theft, there are a few simple steps that you can take to help reduce the amount that you lose from dishonest employees.
Step #1: Make Sure the Anti-Theft Policy is Clear
The first step in reducing employee theft is to develop an anti-theft policy and to review it with employees on a regular basis. While it may seem obvious that employees should know not to steal, reviewing an anti-theft policy helps them to understand that this is an issue that you take seriously. It also communicates that you are watching for this sort of behavior, which will make employees less likely to take a risk by stealing.
As you go over your company’s anti-theft policy, be sure to define what is meant by company theft. Some employees think the phrase is restricted to only taking money or products from the company. Other actions, such as stealing office supplies, using a company credit card for personal expenses and taking company information are also forms of theft.
Step #2: Train a Backup
Employees who work with little supervision or oversight are the most likely to steal, such as an accountant who has worked embezzles from a company after working in the same position for many years. To help prevent this, be sure each employee has a designated backup person who is also trained to do the job. Simply knowing that the backup could check on the work at any time can serve as an effective deterrent for preventing theft.
Step #3: Utilize Technology
There are many forms of technology that can help catch employee theft without costing the company a whole lot of money. Retail establishments, for example, can install software to flag potentially fraudulent transactions, such as an unusually large number of voided sales, returns and after-hours purchases. Surveillance cameras can also go a long way toward deterring theft and catching thieves in the act.
Step #4: Learn How to Recognize Strange Behaviors
Employees who steal from their companies often start to exhibit strange behaviors. Red flags include an employee who doesn’t like when others use their workspace, an employee who frequently stays at the office for long hours or someone who is reluctant to take vacations or otherwise be away from the workplace. An employee who suddenly has many new expensive items may also be stealing from the company, as may someone who is very vocal about feeling underappreciated or underpaid. The latter may begin stealing in an effort to “make up” for feeling unappreciated or overworked.
Step #5: Make it Easy for Employees to Report Theft
Employees who wish to be honest may not want to get caught up in a tangled mess by reporting theft. By giving employees a way to anonymously report suspicious activity, you will be more likely to catch the thieves working for you. According to the ACFE, businesses with fraud hotlines detect issues 50 percent faster and experienced 41 percent less costly fraud.
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