Don’t look away — your well-made products or expensive equipment might just disappear without a trace. Who could be the culprit? Maybe a shoplifter or a passerby is responsible, and there are retail theft prevention tips you can use to stop them in their tracks. But what if it’s an inside job that you’re just not noticing? Employee theft is more common than you might think, and even small instances here and there could put a big dent in your bottom line.
Is employee theft really that big of a deal?
The answer to that question: a resounding yes! According to the Retail Council of Canada, employee theft costs Canadian businesses about $1.4 billion every year. Can’t wrap your head around that number? We don’t blame you. To put it into perspective, that much money could buy you a professional sports franchise, 14 private jets, 88,000 fuel-efficient cars, or over 233 million medium two-topping pizzas.
Needless to say, employee theft does substantial damage to businesses across Canada. But you may want to know how it could specifically impact your business.
How much damage could employee theft cause your business?
The Retail Council of Canada found that, on average, employees steal about $2,500 in cash or goods from their employer before they’re caught. In comparison, customers only steal about $175 in cash or goods. This may seem surprising to you, but it makes sense when you realize how much time employees have at their disposal.
Employees tend to steal over a long period of time, and they usually don’t steal all at once. This slow burn could eat away at your business’ profits. You might not notice the damage until it’s too late, either. The Retail Council of Canada believes roughly 566,000 employee thefts go undetected each year.
And it’s not just products and cash that employees could steal from you. Tools, equipment, furniture, and other property could be snatched by employees and fly under your radar. If you’re a contractor or service provider working on external jobsites, your clients’ property could be stolen by members of your team. If employees have access to your business’ credit cards, electronics, and software, confidential business information and customer data could be stolen and sold to other criminals or held for ransom.
How can you prevent employee theft?
Employee theft and dishonesty is damaging, but it can be prevented. Here are 10 tips you can use to help prevent employee theft and dishonesty at your business. Check out the tips right here or download our handy tip sheet.
- Establish a pre-employment screening program. The program should include reference checks. You may also want to perform criminal and credit checks depending on the position you’re hiring for.
- Create security guidelines. The guidelines should outline the company policy for employees who are caught stealing.
- Make use of human resources programs. Develop programs designed to build employee loyalty and align employee and company goals. For example, you could offer training and skills upgrade programs or mentorship programs.
- Ensure that company merchandise or property isn’t easy to steal. This could include a number of tactics ranging from locking up merchandise to installing a surveillance system.
- Establish controls. Controls should be in place for things including petty cash disbursements, bank deposits, withdrawals, issuance of cheques, payrolls, reconciliation of bank statements, and payment of invoices.
- Ensure no one employee has control over all parts of a financial transaction. Owners should separate responsibilities and functions so more than one employee deals with any given financial transaction. Workflows should also be organized in a way that ensures one employee verifies the work of another.
- Perform regularly scheduled and random inventory checks. A program should be implemented to manage these checks and ensure they’re done properly and consistently.
- Monitor the premises with closed circuit television (CCTV) surveillance. Before installing this type of system, be sure to keep in mind any applicable privacy law requirements with respect to surveillance.
- Check merchandise records. All incoming merchandise should be checked against purchase invoices and all outgoing merchandise against shipping documents.
- Being buds can bolster a budding business. By simply being nice to your employees, they may respect you and your business more – an attitude that can help your operation grow and prosper.
What else can you do to protect your business?
Following these tips can help you distance your business from dishonest employees. But sometimes, even the most prepared businesses can fall victim to theft and damage from a variety of sources. That’s why having the right protection in place is so important: insurance coverage that’s the right fit for your business can help you gain piece of mind and shield your business’ bottom line from bad employees.
This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information. Terms, conditions and exclusions apply to coverage. See policy for details.