Avoiding Employee Theft Losses
I have been reading many articles, across many industries, stating that video surveillance systems are the key to eliminating theft. Well, let’s first say – NOTHING CAN ELIMINATE EMPLOYEE THEFT completely. You can only hope to reduce it and contain it.
Averaging 1 – 3% of sales annually, “shrinkage” as it is often politely called, eats away at profits causing business owners to be reactive rather than proactive in the area of loss prevention. Video systems are a wonderful addition to an aggressive loss prevention and employee theft monitoring program.
No matter how sophisticated the system is, ultimately it comes back to the human factor – the person reviewing the footage and their ability to identify and catalog actions/behaviors of concern. Most employees who steal don’t do it in an obvious manner. They have methods that in some cases have been perfected over the course of time – or have been taught to them by other employees! You need to know what to look for – the path of every transaction and how it can lead to pocket money, avoidance of recording a cash transaction, skip procedures, or hiding merchandise to steal.
A recent article correctly indicated that while businesses account for theft on their balance sheet, few actually budget for prevention of theft from employees – I see this with many clients. The C-Suite has to realize that employee theft is an expensive drain on the bottom line and while it can’t be eliminated, it needs to be managed and contained. Some ideas:
- Develop a program to calibrate transactions, cash & merchandise.
- Assign a schedule and budget to manage the program.
- Train the program observers to identify signs of potential employee theft.
This can’t be done without a committed focus at all levels within the organization and the assignment of a budget to execute the program. If done properly a company can save thousands, and in some cases millions, of dollars in avoidable workplace theft.
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