Daylight Robbery

Many businesses are victims of theft – and many of those don’t have to look far for the culprit.

Staff theft is an issue many employers do not like to think about or consider, however, it is a real problem in New Zealand. In 2010, shop theft (both shoplifting and staff theft) is expected to have cost New Zealand over $1 billion. Staff theft has increased dramatically in the last five years, and now outweighs shoplifting as the major cause of profit loss for many business owners. Often, it goes undetected until potentially thousands of dollars in either cash or product have been stolen. Usually it is a ‘gut feeling’ that things aren’t quite right but, without evidence, it often goes unreported or no action is taken. The idea that a trusted and respected member of your team is stealing from you, is one that many business owners do not like to face, yet it is a very real part of employing staff. It is a fact that many of the employees caught stealing have a close working relationship with the owners.

Rarely do employees steal from businesses because of need, it is usually the opportunity has arisen, and the temptation is too great. If businesses don’t have any policy, procedures or practices in place to reduce or minimise staff theft, it will be major issue for business owners.
Some simple steps can help to reduce the incidence and effects of staff theft for all business owners. The best place to start is in hiring the right person.

Check References
Don’t just think that referees will never give a bad reference. Always speak with previous employers and ask about work habits, why they left, did they give notice, any performance or issues they had with the person. Ask them to be as honest and frank as possible.

Background checks
These are necessary – never rely on everyone telling you the absolute truth. They will only tell you what they think you want to hear. Part of your hiring policy should be to complete thorough background checks on all prospective or short-listed people. These checks should include:
• criminal convictions, it’s not a good idea to hire people with dishonesty or drug related offences.
• drivers licence – especially if their role involves driving.
• education verification, e.g. degree/qualification status. There have been some high-profile situations of people in powerful jobs that have falsified or lied about educational qualifications.
• credit rating – people with a poor credit rating may be more inclined to feel the ‘need’ to supplement their income with your product or cash.

Complete and Thorough Employment Agreements
It is imperative that you have complete employment agreements for every staff member. It offers protection to both employees and employers. You may include clauses such as the use of CCTV within the working environment, random bag and vehicle (if appropriate) checks on employee departure, drug and alcohol testing, zero tolerance of theft, reporting of theft issues, performance management, investigating serious misconduct etc.

Anonymous Tip Lines
Frequently, other staff members may be aware that a person is committing theft from the business, yet they don’t report it for a variety of reasons. Ensure all your staff members know how they can report theft – either anonymously or privately. A reward programme may go a long way to encourage staff members to report other staff members, but this should always be kept confidential.

Conduct Surprise Audits
These will reduce the risk of employee theft, as the thief may not know when the next audit will occur. These should not be discussed with staff members.

Building a Solid Company Culture
Motivated, focused, respected, happy staff members are less likely to steal than those that are disgruntled, disillusioned, feel undervalued or unrewarded. Your company needs to have an open and honest company culture which talks about theft, rewards and recognition as a team. Get to know your team – be aware of changes in circumstances, danger periods (pre and post Christmas), warning signs, such as addictions to drugs, alcohol or gambling etc. You may notice staff living outside their means – spending more than they earn – these people must be getting more income somewhere. Once you know your team, you will pick up subtle changes quicker and may be more in a position to offer assistance or help, if needed and, thus, reduce the chances of them stealing from you.

By employing the right person at the start, having sound policy and procedures in place to minimise staff theft and ensuring a zero tolerance of all theft related issues, you may lessen your chances of being subjected to it, but the beast never sleeps, don’t believe your business is not immune to it – because it won’t be. Good Luck.

Lynda West
www.educators.co.nz