Are you safe from employee theft?
"It won’t happen to me, my employees love me!” OK, that may be true, but, despite the fact that your employees may love you, it is only smart to take steps to protect yourself from the few that would take advantage of your good humor and rip you off.
Why do employees steal from you, the "Good Employer"? Here are some reasons why –
Staff steal for many reasons. In most cases theft does not occur out of any specific need, but simply, because of opportunity and lax business controls, or as a form of 'compensation' because the worker feels poorly treated. A common rationalization is: "the business is making heaps of profit and I'm only taking what's really due to me for my hard work."
Theft is not necessarily just in the realm of the lower paid worker either, as research shows that theft happens in all areas and at all pay scales.
MOST COMMON FORMS OF THEFT:
1. Removing cash from the till
2. Taking home stock
4. Fictitious 'supplier accounts'
5. Fictitious petty cash purchases
6. Taking cash 'commissions' from suppliers
7. Using business facilities and materials for personal gain
8. Giving away or using confidential company information
There are some measures you can put in place to help safe guard your business from internal theft:
Create procedures that require transactions to be recorded in a timely manner, following an established process
Adopt a zero shortage policy (stock, cash, etc.) and stress shortage control even if losses diminish
Rotate business duties to avoid employees gaining a monopoly over functions that are theft prone
Limit pricing authority to a small group of employees
Make it clear to staff and customers that you will prosecute thieves rather than settling for an apology. If staff sense you lack confidence in this area, they might take advantage
Have only one exit point for staff - in full view of other staff and management
Have an anonymous tip-off policy
Ensure that all staff are subject to the same measures
Don't employ thieves in the first place. Be vigilant about checking the references of new employees. Few people who steal actually have a criminal record, so ask previous employers how honest the person was
Put appropriate computer and information technology safeguards in place. Use passwords to control access to different areas. For example, not everyone should be able to access the accounting software
Try thinking like a thief; Try imagining yourself working in the various roles in your business. How, when and how often could you steal if you were in charge of certain functions and how would you go about escaping detection? This exercise can be very productive in revealing some serious security gaps and loopholes in your business
Make staff directly responsible for theft control by explaining it affects the basic viability of the business and therefore everyone's job depends upon stopping theft and fraud
Include your staff in theft prevention schemes and get their input. Make them aware of your objectives and the measures you are taking to prevent theft occurring
Spell out clearly the business's policy on theft and fraud in employment agreements and in the business' operations manuals. Leave no one in any doubt as to what the rules are and what is expected of them
If you are unlucky enough to discover that you have a dishonest employee, it is advisable to carry out all the steps of the fair process under the Employment Relations Act before you report a suspected staff member to police. Otherwise , if police decide not to prosecute, any later decision to ask a staff member to leave could be deemed as unfair dismissal.
For further information about employment relations visit www.dol.govt.nz or phone the Department on Labour on 0800 20 90 20