Employee theft is a serious problem, and I am not just talking about ink pens and staplers. Though, let’s face it: pens and staplers aren’t free.
When it comes to taking a business risk, there is none bigger than hiring someone. Your employees are your biggest liability. Coming to grips with that fact is difficult, and runs counter to how you would like to think about the people who work for you. Fortunately, there are a few things you can do to help keep them honest:
Audit Everything, All the Time
If something goes missing, and you are the last person to enter the supply closet since the last audit, then you are suspect number one. In most businesses, the supply closet is not where the most valuable assets are stored. You have to audit everything with the rigor of an IRS agent. The AICPA advises:
Create a staff culture of trust, where employees can step forward to help you protect your business from theft. Tell your employees that you trust them implicitly, but make it clear that you have zero tolerance for theft. A CPA can help you implement internal controls, safeguards, and procedures to protect your business.
Auditing on a regular basis is good. Auditing on a random basis is even better. You don’t just want an audit to discover theft has occurred. You want it to deter would-be thieves. Audits will be more annoying, but also more likely to act as a deterrent if employees know they will happen randomly.
Video Everything, All the Time
The cameras at the register area of a convenience store are not there to stop a person hopped up on drugs from emptying the register. Nothing will stop that. The cameras are there to keep employees from emptying the cigarette cabinet and the lotto drawer. In a department store, about the only thing out of reach of the video camera is the inside of the changing room, we hope.
While shoplifting remains the favorite pastime of kleptomaniacs, everywhere, the U.S. Chamber of Commerce pegs annual losses to employee theft at about $400 billion. That is enough to make it the #1 cause of small business failure.
Compared to that, the price of running video 24/7/365 is quite small. If you have a retail establishment that offers goods cash-strapped consumers are willing to purchase with their hard-earned money, you have goods that underpaid employees with considerably more opportunity will want to steal. It is irresponsibly naive to think otherwise.
Secure Everything, All the Time
We already know that some people will steal anything that is not nailed down. The solution is to nail everything down. By that, I mean secure everything. Put up physical barriers so that it is considerably more difficult to just pick something up and waltz out the door with it.
This goes double for sensitive information. The most valuable asset in your company’s possession is information. You may not realize the truth of that until sensitive information about you and your clients leaks to the public. If the only thing ever stolen from you is money, you can survive it. You can always make more money, and possibly recover what was stolen. When sensitive information gets out, it is a bell that can never be un-rung. Just ask Sony.
Humans routinely take things that do not belong to them. It is a sad truth about humanity that shows no signs of changing anytime soon. It is not just a simple matter of income and education. Even smart, wealthy people steal. As a business owner, you are viewed as a target. Many people feel they have a right to steal from “the man�, even if you are a woman.
You have to put the systems and practices in place to keep honest people honest, and that catch dishonest people in the act. The success of your business depends on it.
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