Advice: Staff Theft Prevention
Unaccounted losses, often called “shrinkage”, accounts for an unnecessary amount of lost profit opportunity.
In the retail environment this is often blamed on customer theft – shoplifting. However, an increasing number of studies are revealing that an appreciable cause of shrinkage is due to staff theft. It is therefore relevant to all business environments to consider the issues of staff theft. It is insufficient to simply ask yourself, “Do I have a problem?”. It is more appropriate to ask, “Do I know if I have a problem?”.
Reasons why some businesses ignore the problem may include:
Lack of data (eg stock control cannot indicate problems until the annual stock-take). It is easier to tackle other problems (eg it is often easier to blame it on a recent burglary or on shoplifters). It is not seen as good for morale amongst staff. It could reflect badly on the company (eg a bank with dishonest employees could cause adverse publicity) or it may reflect badly on an individual manager’s ability.
• How easy is it to steal from this business? Can staff simply walk away with items?
Are they given unrestricted access?
• How acceptable is it to steal? Is it simply seen as a staff “perk” and the attitude
“I do enough for them” prevails?
• What is the punishment? Is the punishment for theft clearly defined? Is theft perceived as a dismissable offence?.
Profiles of Staff Theft
Address the issues of:
• How do staff steal?
• How many staff steal?
• What do staff steal?
• Why do staff steal?
• Which staff steal?
• Where do they steal from?
• Do staff ever get caught?
• What stops staff theft?
The most effective prevention strategy for your business depends very much on your own individual circumstances.
On examination of businesses where staff theft has been a problem, certain organisational similarities included:-
• Large amounts of cash & stock;
• Minimal supervision or staff responsible for asset control;
• Minimal record keeping;
• Lax in account reconciliation;
• Documents were not serially numbered and checked.
Generally, you may wish to consider:-
• Improving staff selection procedures (eg integrity testing, etc);
• Define the company policy;
• Define employment contracts;
• Develop internal controls (eg stop check staff leaving, etc).
• Regular stock checks involving staff.
This very extensive subject has only been dealt with very briefly. It is important, however, that the subject is not ignored. Staff theft should be measured and managed like any other business issue.