Business owners and decision-makers must learn to recognize threats that others may not see. For even the most astute of leaders, though, it can be difficult to acknowledge that the most significant threat to your organization may come from within.
A happy, healthy enterprise, in general, is one in which employees feel more like family, in which the best interests of the team and the organization prevail. Such an ethos can make it challenging for business leaders to appreciate, accept, and proactively safeguard against employee theft.
The reality, though, is that employee theft is both real and ubiquitous. If business owners are to meet their obligation to protect their business and all connected to it, then they must be aggressive in mitigating all internal threats, including and especially those presented by dishonest staff members.
Statistics on Employee Theft and Robbery
No one wants to think about the possibility of employee theft, let alone speak about it openly. It can feel far more comfortable to deny it as a real and present danger to your company, a threat emerging from within the team you respect and admire.
The statistics, however, reveal a far different, and much starker, truth. Employee theft is more common and more damaging than most of us want to believe. For instance, more than half of all incidents of business fraud are committed by employees, including both internal staff and external partners.
It’s also estimated that more than 20% of small business owners have experienced employee theft.
Perhaps most disturbing of all is the evidence that the greatest internal threat seems to come from middle management, those in positions of trust. The increased prevalence of employee fraud among this group may be attributed to their increased access to a company’s most sensitive and valuable assets, which makes fraud easier to commit and harder to detect.
Properly Disposing of Sensitive Information
As suggested above, employee theft can often be a matter of opportunity. Those who have ready access to valuable assets, from financial accounts to intellectual property to data, may be tempted to use it for their own gain or for the benefit of someone they love.
That’s why the first and most important thing you can do to prevent employee fraud is to minimize the opportunity to commit it. This would include, for instance, ensuring that all office equipment is properly secured either with physical locks or, for digital technologies, with strong passwords and virtual private networks (VPNs). This will ensure that only those with the proper authorization can gain access to critical records.
In addition, it’s vital to properly dispose of collateral, such as hard copies of financial data and other sensitive information, to prevent them from falling into the wrong hands. Discarding them is far from sufficient. They also need to be shredded promptly, ideally by a professional shredding service that can ensure that nothing remains that can be reconstituted and stolen or misused.
Additional Prevention Strategies
In addition to properly shredding documents containing potentially sensitive information and limiting access to office equipment and technology, there are a number of other things you can do to protect against employee theft.
For instance, if you want to minimize internal threats, then rigorous screening of prospective employees is a must. At a minimum, you should conduct thorough background checks of all prospective employees and follow up on both personal and professional references.
You will also want to cultivate a culture of honesty and integrity in the workplace. This should include intensive training in the ethical standards and practices by which all employees are expected to operate. Policies and procedures should be addressed during onboarding and annual training and codified in the employee handbook, which should outline a zero-tolerance policy for deliberate deceptive and/or unlawful conduct relating to work.
The policies can then be reinforced through practices that limit opportunities for office theft, from installing CCTV cameras and keystroke trackers to more effectively monitor employee activity to performing surprise financial audits and operational inspections to ensuring that the responsibility for financial processes is distributed among multiple individuals rather than resting in the hands of a single person with full autonomy and power over the company’s money and finances.
Understanding the Different Types of Employee Theft
If you want to prevent employee theft, you need to be able to recognize the various forms it may take. To be sure, employee theft often involves the stealing of money. However, this is just one way that an employee may deprive the company and its stakeholders of that which is rightfully theirs.
Theft may also involve the stealing of merchandise for personal use or profit, as well as the theft of supplies for non-work-related purposes. Over time, this can result in significant financial losses to the company.
In addition, employee theft may involve the misappropriation of intellectual property or data, which may then be sold, shared, or otherwise leveraged for the employee’s personal gain.
The Takeaway
As difficult as it may be to admit, employee theft is both real and prevalent. It poses a significant and ongoing threat to organizations large and small. For this reason, it is incumbent upon business leaders to acknowledge and understand the threat and to take strong, prompt measures to minimize the risk.