Wednesday, December 19, 2012

Employee Theft — The Cost to you as an Employer!

Woman with money!

Employee theft and fraud continue to rise as economic conditions worsen and the motivations for stealing are need, opportunity or entitlement. Employees are 15 times more likely to steal from an employer than a non-employee. The U.S. Chamber of Commerce indicates that employee theft costs U.S. Companies between $20 to $40 billion dollars a year.  An article by Reference for Business reported, "that in the early 1990’s, the DOC estimated that employee theft and embezzlement activities accounted for one out of five business failures, many of which were smaller firms that were unable to weather the erosion that those activities brought to their bottom line". The U.S. Chamber of Commerce also shows that 30% of all business failures are due to employee theft.

Employee theft is defined by any use or misuse of an employer’s assets without permission to do so. Theft can be done through stealing money, theft of time, supplies, merchandise, company property, overcharging customers and pocketing the change or company information. Here are some steps that small businesses can take to curb employee theft:

  • Integrity Testing (honesty testing)
  • Background Screening (criminal checks)
  • Build Awareness
  • Establish Zero-Tolerance Policies
  • Control Access

As we can see employee theft is a problem all small business owners face and there are numerous ways of dealing with these problems. However, the main goal is to ensure that your business and your assets are protected... take some precautionary methods and properly screen job candidates before you hire them.

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