Employee Theft: How do we deter it?

According to industry studies, employee theft costs companies billions of dollars each year. It has been cited that as much as half of all losses are the result of employee dishonesty. Resolving these issues is important, but deterring employee theft incidents is a better business practice.

So, how can we deter employees from stealing?

Although we can not prevent all employee theft, there are three steps a company can take to greatly deter it or to reduce the impact of long-term dishonesty.

1. Code of Conduct

Your company should have a written code of conduct in its employee handbook. These are the behaviors for which there is zero tolerance. In addition to Human Resource related items, you should specifically and directly state that dishonesty is a violation of your code of conduct. The type of dishonesty should also be clear and specific to include theft, borrowing funds, giving away product, and violating the companies discount policy.

It may seem obvious that theft is both against policy and the law, and it may feel unnecessary to remind employees not to steal but you would be surprised how employees rationalize inappropriate actions. The simple act of direct communication helps reduce those rationalizations by creating a psychological effect called dissonance.

2. Memorialized Processes

Memorialized processes are a fancy way of saying policy and procedure. P&P not only prevents mistakes but also lets us know when an employee is unexpectedly doing things. Since the number one cause of dishonesty is the presentation of an opportunity to steal, P&P, when enforced, closes many of those opportunities. Potentially dishonest employees know that we know when they are doing something out of the ordinary.

3. Increase Awareness

People do not steal if they think they will be caught. Raise awareness of the behaviors that cause loss, including theft. Let employees know you monitor for these types of activities. And when employees are apprehended, make general announcements, no names, about the occurrence and the outcome or consequences of those actions, without giving away the process.

Many dishonest employees believe that they are the first person to think about stealing in a particular way. Understanding, through communication, that there are very few new methods tampers much of the temptation.

I also strongly recommend getting assistance from honest employees. Give them an anonymous tip line to report their observations and concerns.

We can not stop or deter all dishonest employee behavior and we do not need to assume everyone steals, nor would we want to work somewhere that does. We will do our company a disservice pretending no one steals or by not discussing when employee theft does happen. Through these three simple steps, we can deter at least some of the dishonest behavior.

About the Author

Raymond Esposito is President of Loss Prevention & Compliance for HS Brands Global. He has over 30 years of loss prevention experience and has spent the past two decades building premier LP outsource programs for some of the world’s most well-known brands. He has worked with over 130 retailers within the department store, specialty, restaurant, grocery, and pharmacy industries in the US, Canada, and the United Kingdom.

His articles and interviews have appeared in various magazines, including Security Source Magazine, LP Magazine, Family Circle, and Small Business Radio.

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