Operating a small business without a doubt has its fair share of problems. Take a second and think of four or five things your business is struggling with. I’m sure that was easy. If I was to guess, the business issues you are having deal with finding employees or getting new customers. Or maybe you are lacking the capital needed to reach company goals. I am certain you did not list employee theft as one of your problems.
Employee theft is rarely listed as a problem because it is often going on unnoticed. On average it takes two years until fraudulent activity is discovered within the company. Statistics show that three out of four small business employees have stolen something from the workplace at least one time. Half of the employees that have stolen before actually admitted to stealing from their company more than just one time.
Employee Theft Can Bring Down Your Business
Small businesses that have ended in bankruptcy were a result of employee theft 33 percent of the time. Chances are frighteningly high that employee theft exists within your small business. $175,000 is the average amount that is stolen from a company during an employee theft scheme. Despite these alarming numbers only 1 percent of small business owners think that employee theft is a REAL critical issue facing their business.
It is important for all small business owners to be aware of the red flags that could signal employee theft. Relying on your pre-hire screening tools like background checks and references will give you a false sense of security. Trusting your employees is a must to successfully grow your business but that doesn’t mean that you shouldn’t ask questions when things don’t look quite right.
Signs of Employee Theft
- Obvious Increase in Spending Habits. Has your employee been spending a lot more money than usual? This can be easy to spot if you actually KNOW your employees. Often times owners and managers don’t put forth the effort to truly learn about their employees personalities and lifestyles. There are limitless benefits to knowing your employees lives but this one can save your company $175,000+.
- Arriving Early or Staying Late. Employees that are constantly looking for opportunities to have alone time in the office should be on your radar. It is very common for people to conduct their employee theft schemes during these times. Employees should be investigated further if they come off as defensive when asked about their extended work hours.
- Close Ties With Certain Clients. Does a client only do business with a certain an employee? Employees that are friends with clients or vendors and hangout after work should be a warning sign. Collusion is one of the most common acts of employee theft and usually involves employees friends or family members.
- Employee Parking Habits. Be wary of employees that are parking their vehicles outside normal areas or near seldom used building exits. This goes right along with employees wanting to work independently by staying late or coming early. Employees engaging in theft will make an effort to stay out of sight.
- Unusual Attendance Patterns. Anything out of the ordinary as far as attendance or how an employee handles vacation time should be noted. If somebody is excessively absent from work it could be that they are trying to avoid being caught stealing or do not want to be around while the illegal operations are being conducted. On the flip side of this somebody that never takes a vacation could be because they do not want the person filling in to find out about their secret.
Common sense plays a big role in identifying employee theft. The most important thing for owners and managers to do is just be vigilant. Ask questions when something doesn’t seem or look right. If your suspicions turn out to be nothing then your trust in that employee will grow stronger. However, if your suspicions are validated then you may just prevent your business from going bankrupt.