Employees who steal from your business can be a major drain on your profits. It’s estimated that employee theft costs US businesses a combined $50 billion per year. Each instance of employee theft runs business owners an average of $1,380, which is a big chunk of change. And this issue doesn’t just affect large companies with lots of resources—two-thirds of small businesses have been victims of employee theft.
So how do you keep employees from stealing and hurting your bottom line? Here are some strategies to reduce employee theft and protect your business.
4 Tips to Keep Employees From Stealing
1. Review Your Accounts and Transactions
Checking your accounts frequently for suspicious transactions is a good way to keep employees from stealing. Review your credit card statements frequently to make sure there aren’t any charges you don’t recognize. You should also perform bank reconciliations regularly to ensure all the numbers add up. If you discover a problem, you can figure out what’s going on and put a stop to employee fraud early.
In a similar vein, don’t give one employee too much control of your company’s finances. Important transactions like purchases and payroll should be signed off on by multiple people. The more oversight you build into your company’s financial processes, the harder it will be for a wayward employee to commit fraud.
2. Check Inventory and Security Cam Footage
Another way employees might steal from your business is by taking merchandise. You can help prevent this by checking inventory on a regular basis, paying special attention to high-priced items. Using inventory management software and conducting physical inventory audits will help ensure theft doesn’t go unnoticed.
To deter employees even further, it may be a good idea to install security cameras throughout the store. Letting your employees know that you review the store’s surveillance footage regularly will send the message that they can’t get away with theft. If you don’t have one already, investing in a point of sale system that tracks each employee’s transactions will also make it more difficult for workers to commit fraud.
3. Watch Out For Suspicious Behavior
Employees who are stealing may act differently around you than normal. A usually friendly employee may seem guarded or defensive. You may also notice changes in work patterns.
A model employee may begin having performance issues, while an employee who’s typically first to leave the office might stay late to try to cover up their fraud. If an employee shows up at the office with lots of expensive things that are outside of their means like new cars and designer bags, it could be another sign that they’re stealing. However, it’s important not to accuse or investigate an employee without just cause, or you may open yourself up to lawsuits.
A good way to gather intel is to ask employees to report any suspicious activity they notice. A recent study found that 42% of occupational fraud cases were uncovered because the business owner received a helpful tip. About half of those tips usually come from fellow coworkers of the employee who’s stealing. So it’s worth it to implement a program that makes it easy for employees to report instances of fraud, such as creating an online form they can fill out. You might even consider offering a small incentive to employees who report theft such as a gift card or bonus to encourage them to come forward.
4. Develop Good Relationships With Employees
If you want to keep employees from stealing, building rapport with them is important. Developing a good relationship with your employees may make them less likely to steal. A recent study of 12,000 employees showed that workers who are happy on the job are less likely to commit fraud. If you treat your employees well, they’ll be more invested in your company’s success and less inclined to steal.
How do you keep employees from stealing in your business? Share your tips in the comments section below so we can all learn from each other!
Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.