by Bill and Mary Weaver
Employee theft is widespread and significant. One in every 40 employees was apprehended for theft in 2013. That makes one ponder how many stole but were not apprehended. Many farm businesses are so fast-paced, there’s little chance an offender will be noticed. According to a University of Cincinnati study, the average amount stolen is about $20,000. These statistics were cited by Beth Kelly, Managing Partner of HR Collaborative in Grand Rapids, MI, who works with businesses facing human relations problems, including employee theft. The proverbial, “Locking the barn door after the horse has been stolen,” is not nearly as effective as taking proactive steps to prevent employee theft. According to Kelly, there are three approaches you can take proactively to prevent theft from occurring in the first place.
First, Kelly advises, examine your workplace culture. How important is it to you to do everything in your power to reduce or prevent employee theft? “Some folks waver,” continued Kelly. “I worked with a food processor. I suggested the company mention the consequences of employee theft, defined as taking money, product or equipment, in the employee handbook. The employer replied, ‘I have 150 employees with an average tenure of 17 years. I don’t know if I could fire any of them. They’re like family to me.’
“Anti-theft measures take conviction,” Kelly pointed out. “Theft has consequences beyond monetary loss. It is important to us as employers and employees that we respect each other, respect property and can trust each other.”
If your policies are not clearly enforced, employees may see others walking out with materials or product or borrowing from petty cash and not paying it back. Employees may think this practice is condoned. “You need to impress upon employees that if they see a large theft or a continuing pattern of thefts, it may affect their own paycheck, or even the stability of the company and their jobs. Everyone’s cooperation is needed to help a business succeed and thrive.”
One way to establish a workplace culture that makes it clear that theft will not be tolerated is to put signs in prominent places announcing, perhaps in humorous ways, that you don’t tolerate any kind of theft, and if the company finds out about theft, it will be dealt with swiftly and strongly.
“One company actually put a big red phone in the middle of their administrative offices,” continued Kelly. “They gave all their employees the hot line number, saying, ‘If you see something that’s not right, please call this number. Anything you tell us will be confidential.’”
The phone was great imagery and established the workplace tone. Workers understood that not only is the confidential reporting method available to me. I have an obligation to use it. Sharing something that is going wrong is good for the company.
Because the phone set the tone, it was very rarely needed. “It rang about 7 times in 20 years, and 5 of those were wrong numbers,” noted Kelly. “That red phone had sent a strong deterrent message.”
A second proactive step employers can take is to make stealing difficult. Keep accurate accounts of inventory. Handle cash carefully and accurately.
“I love and trust my accountant,” continued Kelly, “but if we didn’t have redundant systems in place, it would be unfair to her.” Those redundant steps include: someone else picks up the checks and processes them; another person enters them into the accounting system; still another person takes the money to the bank. These steps are taken despite the fact that the company has no reason to suspect any of their employees are even thinking about stealing.
Failure to act proactively and make theft difficult can lead to personal tragedies to employees who perceive they might be able to get away with something. Kelly has seen such unnecessary tragedies. “We were working with a retailer who had wonderful people at the front of the store. But they inadvertently hired one person they never would have suspected. The girl was a high achiever with several scholarship offers, who had been voted most likely to succeed in her high school class.”
However, she and several of her classmates set up a scam so the classmates could pocket the bottle return/exchange money. She was eventually caught.
“The outcome was sad, but if the business had had the proper systems in place, could this otherwise outstanding girl have told her friends, ‘I can’t do that. I’ll get caught.’”?
Another way to proactively prevent theft is with good supervision and monitoring. Those greeters at Wal-Mart and Meijer aren’t there just to be a friendly face! Your employees need to be greeted frequently by a supervisor or manager who is highly visible, talking to employees in a friendly way every day, in some cases several times an hour, to create this visibility.
If employees can have the opportunity to walk out with concealed product, this supervisor can be proactive in a visible but non-threatening way. Your supervisor/manager could ask, “How was your day? That sack can’t be going out with you. You understand that, don’t you?” Your policy needs to be clear and to allow for zero tolerance. Meijer, for example, understands this. If you walk out with a pack of gum, they’ll prosecute you to the fullest extent of the law.
If you have serious problems, use employee monitoring systems at vulnerable areas. The price of this technology has dropped considerably. Point out this system to new hires.
The third area where you can be proactive in preventing employee theft is in employment interviews. Asking certain questions during the interview will help set the tone of your workplace culture and can give you valuable information.
Ask, for example, “Did you have previous jobs, and why did you leave?” Probe for the answer. You may find out the person was fired, and why. Hopefully he didn’t get fired for stealing.
Also ask this question: “We’re very serious about minimizing fraud and theft. Have you ever stolen from an employer?” Just by asking that question, you’re sending a message to the candidate. A dishonest person may decide to take another job where there’s less chance of getting caught.
In addition, do background checks. These only cost about $50. “A word of caution here,” added Kelly. “Check only on people you’re planning to hire – people you’ve already offered a job, pending a successful background check. Under the Fair Credit Reporting Act, you must let the person know you are going to check, and also inform them if you don’t hire them because of something in that background check.
“Incorporating some of these preventive measures BEFORE a theft happens can help to ensure a safe, fraud-free environment for everyone at your business.”