Employee theft has considerable financial and legal effects on a business, which is why it is critical to protect your business’s assets by adopting a theft prevention strategy.
An employee theft prevention strategy starts with awareness and detection and then moves on to prevention.
Businesses around the world lose millions of dollars every year due to employee theft. Don’t let your business be a part of that statistic.
Read on for tips on employee theft prevention.
5 Types of Employee Theft and How to Prevent It
Not only does employee theft have financial consequences, but it can affect a business’s reputation and result in legal consequences, particularly when a company’s or customer’s data is stolen.
Whether you’re in a startup business or have been a business owner for years, here are the most common types of employee theft and how you can prevent it.
1. Data
Data theft can ruin a company’s reputation, resulting in financial loss and legal consequences. Data theft includes the theft of customer and client information, including credit card and bank information, addresses, social security numbers, and other identification numbers.
To prevent data theft, a company should have strict data security policies. Security policies that prevent data theft include a no cell phone policy when handling sensitive information, strong passwords, two-factor authentication, disposal practices, and more.
2. Payroll
Payroll theft occurs when somebody who works in the financial department of a business steals employee checks, writes fake checks, and more. To prevent payroll theft, set up a checks and balances system and reconcile payroll.
Companies should also segregate payroll duties to minimize the risk of payroll theft. You should also set up a system to check that employee records are all verified.
Businesses can also prevent payroll fraud by performing regular internal payroll audits, reviewing payroll reports, and switching to modern payroll software.
3. Inventory
Inventory theft occurs when employees steal products or other items from their employer. They may sell the products or use them for personal use.
To prevent inventory theft, it is critical to adopt theft prevention measures. Such methods include the installation of security cameras, locking away expensive products, creating awareness among employees, and more. By creating awareness, you create a workplace culture of employees who respect their employers and understand the consequences and ramifications of employee theft.
4. Cash
Cash theft is most common in retail businesses and occurs when employees steal cash from cash registers, overcharge customers and pocket the difference, etc. Cash theft prevention strategies include installing security cameras, ensuring that your company has clear policies and that employees are aware of the consequences.
5. Services
Service theft can occur in any organization. It often occurs when an employee asks another employee to offer them a free service.
Many companies offer discounts for services to prevent service theft, but some employees take advantage of these discounts.
To Prevent Employee Theft, Create a Culture of Integrity
Create a culture of integrity in your company and ensure all your employees understand the consequences of theft.
Create a company culture that shows how much you value your employees. Mirror the behavior you want to see and set an example.
Whether you’re just starting a business or are already running one, it is critical to have theft prevention and security measures in place. Be sure to implement policies, procedures, and a code of ethics that prevent theft. Educate and empower your employees, encourage accountability, and focus on security best practices.
By ensuring your business has clear security policies, you can prevent theft and protect your company from financial and legal consequences.
Hire a Legal Expert to Help Protect Your Business
Hiring a legal expert to help navigate you through the intricacies of running a business is critical to business success. Your decisions today could impact you for years to come — with good or bad results. Hiring a legal expert can help ensure you make the right decision while protecting you from disastrous errors.
Need a lawyer for your family business? Call 303-780-7333 or schedule an appointment for a free consultation.
