Workplace theft is costly.
A September 2012 report by the Association of Certified Fraud Examiners found the typical organization loses 5 percent of its revenue to fraud each year. That translated to about $3.5 trillion globally in 2011, according to the report. The median loss caused by occupational fraud cases in the ACFE study was $140,000. More than 20 percent of these cases caused losses of at least $1 million.
This article focuses on some of the reasons employees steal and what can be done about it. Of course, some theft is planned but most is not.
It is actually easier to prevent intentional theft than theft that isn’t perceived as such by employees.
Examples of unintentional theft include borrowing money from petty cash with the intention of paying it back, taking home office supplies (school is starting soon) or first aid supplies because “everyone does it.” Other examples include downloading company software or taking work product at the time of termination because “you worked hard on that.” Or, the employee who feels he or she is worth more to the company than he or she is paid. Then, there is the employee who attends to personal matters during working hours - stealing time is another form of unintentional workplace theft.
To prevent theft, whether intentional or not, employers can take preventative measures. When interviewing applicants and training employees, share these tips to cut down on incidents of theft - simply talking about it can be a great deterrent.
• Develop a policy regarding your commitment to keeping the company free from theft and then share it.
• Explain that your company is aware of employee theft and takes it seriously.
• Review statistics.
• Explain how theft in the workplace jeopardizes the well-being of the company.
• If you use surveillance equipment, disclose this to applicants and employees. Mention it is for their protection as well as the company’s.
Other ways to monitor for theft in the workplace include watching and tracking scrap rates, reviewing voided sales, verifying new vendors, conducting background checks on applicants and reviewing timecards against job cards.
Additionally, you may reserve the right to search any personal items, including vehicles, on company property. Let applicants and employees know you will involve the police if theft is suspected and prosecute. Explain that an instance of employee theft will follow the employee for the rest of his or her career. Explain preventative measures you have in place for protecting employee identity. Explain your right and intention to review employee Internet and email use.
As a condition of employment, ensure all employees sign a non-disclosure agreement. If you have an EAP in place, suggest it as an alternative to work out personal problems.
Employee training on ethics and professionalism is another good way to prevent unintentional theft. Ask employees to be on the lookout for others who might be engaged in workplace theft. Employees should be encouraged to handle workplace theft issues in one of two ways.
If the theft is unintentional, the employee who is taking things might not have thought that his or her actions were unethical so saying something directly to the co-worker might be effective if there is a trusting relationship.
Employers should also allow anonymous reports to be made if someone suspects workplace theft. Assure employees complaints will be investigated and do not require a name or other identifier for the employee to make the report.
If the theft is intentional, then it should be reported immediately by the employee witnessing it without any attempts to intervene. Company officials who suspect intentional theft should involve the police. Allowing a thief to move on to another employer also is unethical and unprofessional.
Finally, employees should also be aware of their own actions and what could be unethical behavior or even theft.
Most people want to do the right thing and preserve their reputation, so calling attention to behavior that could damage it might be enough to stop office supplies from disappearing or to cut down on personal texts, cell phone and Internet use during work hours.
• Karla Dobbeck is president of Human Resource Techniques Inc. Call 847-289-4504, or email firstname.lastname@example.org.