Theft of company goods, financial fraud, even petty thieving can be an existential threat to a business. In fact research from Data-Label finds that 20% of adults admit to stealing something from work. That ranges from small scale pilfering to full-scale fraud.
A trusting environment can be important for employee motivation and productivity, so you need to put in place policies and procedures that are seamless. That way employees are protected from temptation and your business is secure from inside losses.
So, if your goods or revenues are being eaten into inexplicably, what should you do? Here are a few tips:
Trust and verify
There are people who are plausible, instantly likeable, impressive, even charismatic, and fundamentally dishonest. Why risk being taken in? It is simply good business practice to check into the claims a potential employee makes about their past record and experience. That is doubly true if they will fill a role where they handle cash, high-value goods, or have access to sensitive customer or financial data.
Study what previous employers tell you very carefully. They will be slow to include accusations of dishonesty in references unless they have absolute proof – but they may well hint at their perceptions. When there are gaps in a potential employees’ record ask them why.
Make sure that the new employee is clear on the rules. Cover the code of ethics during the induction process. And, as a group of people, revisit the code of ethics on a regular basis. Give employees the opportunity to update its contents and to renew their commitment to it.
Have a clear code of company ethics and conduct
A code of ethics draws clear lines, marking out what is acceptable behaviour and what is not. Dishonest behaviour often starts out in a petty way and then escalates. For instance, there are people who regularly dip in to the office stationery cupboard for their own needs, post their letters using the office franking machine and keep a book of blank taxi receipts in their desk drawer. It’s not too big a step for them to dip into the petty cash tin or take a spare lap top home. Catch behaviours early.
A code of ethics also encourages people to treat each other – and your company – respectfully. Bad behaviour often starts small and builds up. Where there is petty thieving, others in the workplace may well know about it, even if they do not collude in it. Are you creating the kind of atmosphere in your workplace where employees feel comfortable in challenging dishonest behaviour by colleagues – or even their immediate bosses? When processes are transparent and expectations are clear, employees will find it easier to speak up.
Follow the company code of ethics yourself
Once the code of conduct is developed, it should be documented and agreed to by everyone in the company – including you. Stealing can be driven by employees’ desires to “get even” with companies or managers who they feel treat them in an unfair or unfeeling way. Poor planning or preparation that places employees’ in difficult situations, refusal to accept responsibility for your own errors, or betrayals of employees’ trust can quickly undermine their respect for you and your company.
Some researchers found situations where employees were stealing parts and equipment that were of little value to them (though often of considerable value to the company). The motivation was a combination of thrill-seeking and a desire to get one over on the employer with a show of contempt.
Know what’s happening
Get to know your employees. It’s much easier to steal from someone you don’t know very well. Surveillance systems can seem like a good option. If you do install surveillance, ensure that it is designed to protect areas of high risk – not as a system to spy on your employees. That will be counter-productive, at best.
You are far more likely to be the victim of crime, if you create temptations and fail to monitor them. Regular audits are a good deterrent. They will help you ensure that your records and the actuality are in accord. And audits will help you detect theft and fraud. Identify high-risk areas of your business and audit for violations every six months or so. Include expenses, cash and sales reconciliation, holiday allowances, credit card permissions and access to online accounts.
Recognize the Signs
Workplace criminals often show signs of stress or an aversion to oversight. Evidence of alcohol abuse can be an important indicator here. Keep an eye out for people who treat their work area as a private domain and resent supervision or transparency. Consider the motivation of people who like to work alone at unsocial hours or take work home. If someone avoids taking their holidays, you should investigate why. There may be a fear of discovery. Disappearing and reappearing financial records should bring up your antennae. And what about signs of financial stress? Debt can be a motivator as well as greed.
If you do detect signs of stress, start by doing your best to help. A helping hand today is often the best way of preventing future problems.
Image: fraud via Shutterstock