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Sonitrol Commercial Security Blog ... by Joe Wilson



Understanding why Employee Theft Occurs so That you can Prevent it

Posted by Joe Wilson

Feb 28, 2019 11:00:00 AM

Employees working in a coffee shop

When we think of employee theft, the first things that come to mind are often tangible goods such as money from a till, property and supplies or goods and merchandise. In these situations, careful management and reconciliation through nightly balancing and regular inventory counts can be an effective way to recognize and reduce loss.

However, as a business owner, there are a number of ways that employees can commit fraud and remove assets from your business that may be less apparent. This is because employee theft can go beyond the things that we can touch and see. 

The first form of intangible theft that you must be aware of is time and wages.

When you hire someone, you are coming to an agreement that you will pay them for the time that they dedicate to your business. When an employee abuses that time, they are taking from your business.

The second is data, which is arguably the most detrimental theft that can happen within your business.

As business owners, there is an excess of information that we deal with every day that needs to be protected - this could include anything from product designs and company secrets to the personal information of our customers and employees.

When such information is misused, distributed without permission or taken by your employees, there can be severe consequences for your brand’s reputation. Not to mention fines if you fail to effectively protect and report breaches of personal data.

Finally, there is discount sharing. Discount sharing is when staff members share their company discount with friends, family and even strangers, without the permission of their employers and is becoming increasingly problematic for business owners.

No matter what is being taken from your business, understanding what leads to employee theft is critical to preventing it.

For employee theft to occur, three things are needed – motivation, rationalization and opportunity.

Motivation – There is pressure felt by your employees to commit a theft. This can include real financial burdens such as increased debt or high medical costs, addictions such as gambling or perceived financial need felt by someone who has a desire to buy that which they cannot afford.

Rationalization – The employee must justify their theft to reduce the guilt they would otherwise feel. This can be easier for some than others, depending on their moral standing and values. Common rationalizations often include, replacing a bonus, believing they are underpaid, feeling underappreciated for the time and work they put in, or telling themselves that the business won’t miss it or that it is making more than they deserve/need.

Opportunity – Employees are in a situation where they have the opportunity to commit a fraud. Opportunity is created when your employees have access to assets and information and are able to take it without being discovered. Unsecured inventory, unsupervised staff and lack of surveillance are good examples of creating an environment that is advantageous to employee theft.

While there are things you can do to try and effect motivation and reasoning, such as nurturing strong relationships and encouraging employees to bring the problems to you, it is often difficult to influence your employees needs and rationalization. You can, however, minimize the opportunities available to your employee to commit the fraud.

Sonitrol Western Canada has listed four ways that can help you minimize the opportunity for employees to steal from your business:

1 - Don’t leave employees alone

While there have been instances when employees work together to commit a fraud, as with the case with the two employees of the BC Liquor Distribution Branch last year, most employee theft is a solo act.

Ensuring that your employees work in groups of two or more can help reduce the likelihood of theft. Rotating shifts and partnerships is also effective as it can reduce opportunities for collusion.

2 - Make employees accountable

When your employees know that the assets they are responsible for are being checked and balanced, there is less opportunity for money and goods to go missing. Be sure to implement processes that make your employees accountable and verify their work, such as regular inventory checks, signing in to complete a sale, having a supervisor or manager approve discounts and daily cash outs.

3 - Minimize access

Whether it is valuable inventory or sensitive information, limiting access to important assets is critical to minimizing opportunities for fraud. Be sure to keep tangible assets in well protected storage areas and store personal data on secure servers or in locked cabinets.

You will also want to limit the personnel who have access to these assets to those who require access.

You may also want to consider keyless access control. Traditional locks and keys can be damaged, lost or temporarily misplaced creating greater opportunity for theft. In addition, if you have multiple key holders, there is no way to pinpoint who used their key to access the assets and when.

With keyless access control, you can limit the time frames in which employees have access to their shifts, easily deactivate lost keys and, in the case of a theft, pinpoint whose keycard was used and when.

4 - Install or update your surveillance system

Employees are much less likely to steal when they know they are being monitored and it is much easier to catch the culprit of a theft when you have a record of it occurring.

If you haven’t already, consider installing a surveillance system. If you do have one installed, it may be time to consider an upgrade to a verified security system.

Unlike conventional alarms, Sonitrol's unique verified audio and video security solutions enable our operators to hear and see what is happening in your business and ensure 100% coverage of your business.

For more information on our verified Security and access control solutions, contact us today.

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Topics: employee theft

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Joe Wilson, Owner of Sonitrol Western Canada

We provide our customers with the best commercial security solutions and quality service backed by our unique Guarantee and Commitment to Service. It's something unverified conventional alarm companies simply cannot guarantee!

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