Did you know that as many as 75% of U.S. employees admit they’ve stolen from an employer before?
If you’re a small business owner, employee theft can have a devastating impact. Both on a financial and a personal level. The Balance Careers reports that employee theft costs U.S. companies approximately seven percent of their yearly profits. An estimated 28% of losses due to theft range from $100,000 to $499,000, while a quarter of losses amount to more than $1 million. Sadly, for 33% of targeted companies — especially small businesses — the losses are so significant that they’re forced into bankruptcy.
When you’ve worked long and hard to build your company, the last thing you want is for it to be destroyed due to employee theft. The good news is that there are actions you can take to minimize loss. Next, we will look at ways to prevent employee theft.
Best Tips to Prevent Employee Theft
- Perform background checks on new hires. Run a criminal background check on candidates before you hire them. Somebody who has a criminal history is more likely to steal than someone who doesn’t. In addition, for positions that involve handling large amounts of money or sensitive information, it can be advisable to also check their credit history.
- Always have employees work in pairs. When two employees — or more — are working in the same space, they’re less likely to misappropriate funds or property.
- Install security cameras. Video monitoring works as a deterrent against stealing from the cash register, stockroom or floor.
- Implement anti-fraud controls. Employees who handle your cash register, accounting or payroll have a lot of opportunities to commit fraud or misappropriate funds. You can prevent this by establishing a system of checks and balances in which no single employee can sign off on actions such as depositing funds, writing checks or handling the monthly payroll. In addition, it’s wise to employ an outside, independent accounting firm to double-check your financial records.
- Restrict access to money, as well as valuable items and equipment. If you have to keep money on the premises, install a sturdy safe. Make sure that valuable items and equipment are under lock and key when they’re not being used. Similarly, don’t allow employees access to computer files with sensitive data or financial programs unless absolutely necessary.
- Monitor trash disposal. As Entrepreneur points out, many employees steal things by hiding them in the trash and retrieving them from the dumpster later. To minimize the chances of this happening, use only clear trash bags, put a lock on the dumpsters and instruct your employees to flatten boxes before throwing them out.
Last, but certainly not least, remember to speak to a trusted business insurance advisor about your options to protect your company against employee theft. For more information for tips on how to prevent employee theft, get in touch with Grand Mutual Insurance today.
