Workplace Crime – It’s not just petty theft!

Workplace Crime – It’s not just petty theft!

Crime in the workplace, mostly in the form of employee theft, is a large and fast growing problem for American business.  This is especially true in the retail sector, which is being particularly hard hit.  According to Forbes, employee theft costs retailers $60 billion per year, up from $57 billion in 2014.  Plus, losses from workplace theft contribute significantly to the failures of an estimated one third of retail businesses filing for bankruptcy each year.  But theft of all sorts hits every employer to some degree, whether they are in retail or not.  It runs the gamut from the pilfering of office supplies to the theft of cash, computers, software, tools, building materials and even large equipment.  Factor in ongoing financial fudging in the form of padded expense accounts or downright misallocation of funds, and businesses of every variety have reason to be alarmed.

While some employers see these losses as a cost of doing business and simply write them off, others understand that they should not ignore the problem and that crime can be greatly reduced with a few simple strategies.  Here are a few that are regularly recommended by security specialists:

  • Pre-Employment Screenings.  The first line of defense against all sorts of workplace issues is a thorough screening process for prospective hires.  No less an authority than the Pinkerton agency, recommends that this essential step include following up completely on past work references, using drug tests and, where legal, checking a prospective employee’s credit history.  Although there is not always a direct relationship between past problems and potential criminal behavior, any discrepancies from what is on a person’s application should be seen as red flags.  A rigorous screening process also sets a tone of zero-tolerance from the start.
  • Employee Engagement.  Creating a program of employee training and engagement that directly addresses security and theft issues can reduce incidents of theft.  Also, research shows that workplace theft is often driven by employee resentment on the part of individuals who feel undervalued.  Although there will always be resentful and even dishonest employees in most workplaces, many security analysts agree that workers who see security as a part of their job description can mitigate this tendency, while at the same time underscoring the problems that theft in the workplace creates.
  • Use Teams.  Report after report suggests that workplace theft is principally a crime of opportunity, and unfortunately, that the majority of employees will steal at one point or another if given the chance.  Tasking teams with specific projects and minimizing the amount of time employees are alone with tempting opportunities can go a long way toward curtailing this impulse.  It also encourages loyalty to a larger group that can itself stifle pilfering.
  • Use Supervision, Not Surveillance.  Although surveillance is widely seen as a powerful theft deterrent, a surprising new academic study released in June suggests that cameras do little to prevent theft and that workplaces with elaborate surveillance systems have as much theft as those without them.  Camera systems, it seems, are easy to foil and often inspire employee resentment, a position supported by workplace security specialists like John Case.  Instead, he recommends effective supervision, training, and engagement as more effective tools.
  • Audit Early and Audit Often – Keeping close tabs on the inflow and outflow of materials and money will always help you detect potential areas of loss.

Just like a cyber-attack or data breach, employee theft is often seen as “Not if, but when”.  Best practices show us that a sound Risk Management assessment and implementation program will put you closer to the “If” side of the equation.

Have you had a case of employee theft?  Can you share how you’ve taken steps to avoid a repeat issue?  We would love to hear your stories.

Dave Sinclair, CEO The WorkPlace Solution

dsinclair@theworkplacesolution.com

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About the author

David Sinclair is the CEO of The WorkPlace Solutions and Sinclair Risk & Financial Management.

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The goal of The WorkPlace Solution is to provide our exclusive group of members a solid program to reduce claims and turn what once was a large draw on their P&L statement into a profit center.

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