Employee Theft Prevention
Employee Theft Prevention Tips
Unfortunately, employee theft is something you should always watch out for as an employer. This risk is often greater during times of economic hardship. If employees are struggling financially, even normally honest and loyal workers may be tempted to embezzle money or steal from their job. This temptation may increase if your company is also struggling, especially if you’ve had layoffs or employees are concerned for their job.
Theft comes in many shapes and sizes, depending on your type of business and employees. Typically, employees may embezzle money or steal products, such as food or electronics. In addition, employees may use company time to take care of personal obligations (known as time theft). They may use company time to look for a new job, if they are in fear of losing their current one, or may use work time to take care of personal business.
Protect Your Company
To curb theft at your organization, consider the following safeguards:
- Communicate with your employees about the economy and how it will affect your organization. Be open and honest, but discourage them from panicking.
- Try to maintain a positive work environment even during tough times. Encourage open communication, listen to employees’ ideas and recognize employee achievement.
- Educate your employees about what is considered fraud and the consequences associated with it, and emphasize that the company has a no-tolerance policy.
- Conduct more internal audits, especially of your financials and of any employees who handle customer transactions.
- Increase company oversight by upper management and owners.
- Reconcile bank statements immediately and do not keep large stores of cash on-site.
- Consider using a payroll service to ensure accuracy. Purchase Embezzlement Insurance.
- Consider installing surveillance equipment. Be mindful that this may decrease employee morale if they feel that they are not trusted.
- Upper management may consider taking a pay decrease or not receiving bonuses, so that lower- level employees see that everyone in the organization is affected by the economy.
- Regarding financial tasks, give different employees different jobs, so that one employee does not have too much control. If needed, rotate certain responsibilities and personally double check statements and records on a regular basis.
- Encourage employees to use their vacation time. If someone is stealing, it may become more evident once they are away for a few days.
- Establish a fraud hotline for employees to report suspicious or fraudulent behavior. Give them the option to call anonymously.
- Conduct thorough background checks on all your new hires.
- Train managers and supervisors to monitor employees and watch for suspicious behavior. Any suspicious behavior should be reported and further investigated.
You should always watch out for employee theft, but the risk can increase greatly during a down economy. Take steps to protect your company today.
To learn more about Embezzlement Insurance, contact LeBaron & Carroll at 480-834-9315 today.