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Up to three out of four employees admit they would steal or use company resources without authorization if they knew they would not get caught. Many employees who are caught in acts of embezzlement, theft or fraud against an employer admit they thought they could avoid detection. Other reasons cited for employee theft and fraud include dissatisfaction with wages, anger at being passed for promotion, no sense of loyalty to company, or entitlement.

With such numbers of potential trouble spots, it is important that employers take measures to increase security and protection of assets.

What can be done to prevent theft?

Retailers may find it practical to tag property with electronic devices. These can be sidestepped with removal of the tags, or by their deactivation. Limiting entrance to and from facilities and the use of secret cameras can help.

Strategic cameras that may or may not be known to employees can help catch thieves in the act. Again, keeping strict policies regarding arrival and departure of employees, regarding whether they may carry baggage concealing property, and regarding accountability of property provided for their use can be vital in locating, tracking, and confronting employees involved in pilferage or theft.

In handling of money, strict accountability is important. Whether in drawers or in safes, funds should be limited to at most one employee and one manager (or a manager and a supervising manager, etc.) at any given time. Whenever the responsibility changes hands, say from a cashier to the manager responsible for the safe, each party should count the money and sign for it.

Inventory and inspect all shipments. Stockrooms containing large inventories and warehouses should be restricted to authorized personnel.

What can be done to recognize theft?

Accountability, surveillance, and training are the three big keys to security.

In the office, allowing bookkeepers, accountants or managers unsupervised oversight of large amounts of funds for any period of time invites embezzlement, fraud, and theft. Again, a daily inventory of cash funds, receipts, expenditures and inventories can chart usual flows, and variances in these flows signifying theft or unexplained loss may be occurring.

A running inventory of physical and financial resources is the first line of defense.

Employees living beyond salaries, appearing to use narcotics, showing signs of gambling or simply acting furtively can also signal that such an employee may have fingers in the till. Get rid of disgruntled employees but take care of the rest as best you can.

Also, many store robberies are inside jobs. Managers only should ever see daily receipts, and bank deposits should be frequent and following no set pattern.

What can be done to limit the effect of fraud and theft?

Inventories and signed counts can be compared to expected results to indicate theft. Up the count to a daily exercise if a weekly inventory shows discrepancies, or to each shift if the problem is found on the daily count. This way, the problem can be narrowed to a few employees that work on certain days and even certain shifts. Steps can be taken to transfer or otherwise restrain potential thieves.

Be careful about accusations, however. If you have witnesses or hard proof it was a certain individual, charges pressed can be a deterrent to others.

Spot audits, frequent unscheduled reviews of internal inventories and accounting, can also show theft.

These are only a few of the many security measures available to the modern businessperson. Each operation is unique, and by learning and practicing what applies to yours, you can limit the effect of a potentially devastating flaw in the ethics of the majority of workers.

Learn more about this author, Rscott Stewart.
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