Employee Theft Prevention

While there's no sure way to prevent all employee theft, there are a number of strategies that businesses can employ to reduce the frequency and cost of theft

Clearly communicate anti-theft policy Define company theft Everyone needs a backup Look for strange behavior Put technology to work Give employees an anonymous way to report theft

Other employees often ignore the theft and don't do anything about it.

Employers should not count on other employees to report employee theft, unless they can put a system in place that keeps the "reporter" anonymous and/or a reward program is set up.

There are simple internal checks that can be implemented that will reduce or even eliminate theft within the workplace.

Enforce mandatory vacations Employees are less likely to be able to cover up their theft if they are not in the workplace. Rotate financial duties If possible rotate who handles revenues, distributes cash, or records sales. With this policy it will be easier to catch any undocumented cash outflows. Secure the office Make sure to change locks to offices along with passwords to prevent an opportunity to break in while an employee has the chance. (4)

Business owners are rightly concerned - or should be. Employee misdeeds take many forms

Larceny (outright theft) Skimming (diverting business funds) Fraudulent disbursements (billing schemes, inflated expense reports, check tampering) Embezzlement of raw materials or inventory Stealing business opportunities (misappropriation of customer lists or other trade secrets)

There are many other basic reasons why employees steal

Low morale at the workplace. This is also a major reason why businesses suffer from low production. The employee feels that the business or company has wronged or mistreated them in some way. The employee feels that they are underpaid [and under-appreciated] for the "hard" work they do. The consequences for theft are minimal. The company has no punitive procedures or policies regarding employee theft. If there are no set consequences to employee theft then employees will continue to steal, because they think that they won't be punished. Lack of control over inventory. It is easy to steal because the employer does not have preventive measures to stop them.

The Fraud Triangle

Pressure: individual financial strain Opportunity: impulse decisions when the chance arises Rationalization: belief that the act of stealing is not wrong

Know your employees. Be alert to key indicators of potential theft such as:

Sudden, apparent devotion to work and working late. Lifestyles well above salary levels. Strong objections to procedural changes related to financial, inventory or supply matters. Drugs and alcohol abuse. Moonlighting with materials available at the business. Evidence of compulsive gambling, persistent borrowing or bad check writing.

Money

one of the most common assets that are stolen from employers.

Time Theft

the act of an employee accepting pay for hours he or she has not worked.

Many companies utilize insurance agents

who offer protection plans against employee theft for the future.