Even if you trust your employees, there’s a chance one of them may be stealing. It’s a sobering fact that 75 percent of employees admit to stealing from their employer at least once. Regardless of their trust in employees, business owners should prepare for the potential of theft by knowing what to look out for and how to evaluate the situation, as well as ways to enforce consequences.
Signs and Symptoms
An employee likely won't steal in front of your eyes, so paying attention to more subtle signs is usually a better indicator. For example, look out for an unexplained decline in profits, when business seems to be running normally or better. Another sign is missing inventory, which the employee may be selling on their own. On a more book-heavy level, look for payroll and expense discrepancies, in addition to unnecessary travel expenses and vanishing office supplies.
Also, be wary of employees that insist on working late or when other employees are typically not nearby. If someone seems suspicious, don’t hesitate to dig deeper as a business owner.
Evaluating the Situation
It's crucial not to issue blame before you have the facts, or an employee can sue for defamation and unjust termination. Even if you strongly suspect theft, take a deep breath and evaluate the specifics, including the stolen item, the potential of misplacing the item instead, the item's cost to your business, the timing of the theft and the potential culprit. If the item is not valuable, consider terminating the employee on another basis.
Getting to the Bottom of It
After noticing suspicious behavior, it's worth conducting your investigation before reaching out to authorities. Feel free to involve your lawyer in the process, though discreetly. Consult your lawyer on your state's statute of limitations for such a crime. In addition, collect all relevant documents and evidence, compile witness accounts, prepare confidentiality guidelines for any potential case participants and document all findings.
Your lawyer can also help you understand legal constraints on employee privacy, such as informing you that it's a federal crime to wiretap others without prior consent, unless a court approves. Employee monitoring laws vary by state, so consult your lawyer on which types of evidence are admissible.
Determine the Punishment
With ample evidence to conclude that the employee undoubtedly stole something, it's time to issue consequences. Termination is often the action to take upon repeated theft or high-value theft while paying attention to employee dismissal regulations. If the theft is minor in value or the employee did so out of ignorance, a written warning or probation period may apply. It's up to the business owner whether or not to involve authorities, though for any high-value theft it's advisable.
Several precautions can help to prevent employee theft in the future, such as using stretch wrappers to secure palleted items in a warehouse. It's useful to develop policies that outline employee monitoring and standard disciplinary measures, while also incorporating safeguards to secure the business's assets. In addition, routine financial audits and inventory analysis can help ensure nothing is awry.
Precautionary measures to prevent theft, as well as knowing what to do when it happens, can help prepare a business owner for the unfortunate scenario of an employee stealing.
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