Employee theft is an unfortunate risk all small business owners have. Even when you feel like you trust your employees and you made a good choice, things happen. After taking the right precautions when hiring employees, there are some ways to mitigate employee theft. Employee theft could include stealing merchandise, money from the cash register, supplies from your office or warehouse, or embezzling money when the employee is in charge of the accounting side of your business.
1. Screen Your Employees
It all starts with the hiring process. Screen each applicant thoroughly by verifying all information on their job application and calling previous employers. Don’t hesitate in checking their business and personal references. Develop a system for hiring employees that includes running background checks and credit checks as well. In many cases, individuals won’t get hired as some of their history comes up during the background check.
2. Have a Code-of-Conduct Policy
Write an ethical code-of-conduct policy and work to enforce it. As each applicant is hired at your company, have them read through the policy and sign it stating they understand it. Post it publicly in the office, warehouse, store and other areas of your business. If an employee breaks a rule in the policy, enforce the consequences and don’t let it slide. When employees realize no small infraction goes unnoticed, they will be hesitant to steal from your business.
3. Alternate Duties
Another great piece of advice for mitigating employee theft is to alternate work duties. Don’t assign just one employee to handle the financial aspects of your business where they aren’t supervised and know other employees won’t be paying attention. By alternating duties between several employees, you can avoid embezzlement and other types of theft.
4. Get Proper Security
This is especially important if you own and operate a retail store. Secure your store at all times by having video surveillance equipment, being careful who you give the store’s keys to, and even hiring a security guard after hours if you have expensive items in your store. These types of security measures will help to protect your business. It is also a good idea to change to passcode on security alarm units on a regular basis and not give it to anyone that isn’t in charge of opening the store.
5. Get Business Insurance
Even with these steps, the risk of theft is still there. Protect your business from dishonest employees by getting a crime insurance policy and employee dishonesty insurance policy. Both of these policies cover incidents of employee theft whether through the theft of money, merchandise, supplies, or embezzlement. When purchasing your policies, be sure it covers all types of theft that you are at risk for.
Mitigating employee theft is about a combination of security measures, verifying background information before hiring employees, and being protected if the other steps fail.