Many small Business owners think their employees won’t steal from them. They may believe that “if I’m a good guy my people won’t steal”. Or they might believe “if I’m a hard case nobody would dare steal”. These are mistaken beliefs. The good guy/hard case (or anything in between) personality of the owner has little to do with the amount of theft they’ll have.
Owners of all personality types are equally likely to be taken advantage of. People commit fraud for a variety of reasons, but how they feel about their bosses and how their bosses feel about them is rarely one of the reasons. The number one reason people steal is because they can. If there are no effective controls in place, if it’s simple to do, employees will take supplies, products, time, materials and money from any type of boss.
Unfortunately, when owners believe their personalities can stop theft they also think that’s all they need. They don’t establish truly effective deterrents – a system which promotes transparency and accountability in daily operations. An owner’s personality is the weakest form of defense, fighting fraud is an operational issue not a personal issue.
Small business owners can use the ACE Business Review as a good method to help find and target risks in their business. In conjunction with a theft prevention plan, a business will be able to better mitigate their vulnerability to theft. Here are some things to include in a theft prevention plan to further protect your business.
On-going training – Businesses who have regular loss prevention training for managers and employees lose less money/materials/time per occurrence, have fewer incidences of theft and shorter time periods before the offender is caught.
Reporting opportunities – Giving people a way to anonymously report suspicious behavior is an important part of an overall strategy. Fraud is almost 3 times more likely to be uncovered through employee tips than any other method (Association of Certified Fraud Examiners, 2015).
Verify new hires – Employers are usually lazy about this one. Often the hiring process is the “I like him, he’s hired.” method. Those who are serious about finding honest people will do the due diligence.
Everyone has oversight – Don’t give too much responsibility to one person, and establish checks and balances for everyone. Embezzlement is overwhelmingly committed by trusted people (often family and friends) who have no supervision or accountability.
Know your people – Ignoring people’s behavior doesn’t make it go away or get any better. Almost all perpetrators show red flags (i.e. living beyond their means, financial difficulties, addictive behaviors, too close with vendors or customers, controlling/secret behavior, lying or changing stories, never taking time off).
Commit to consequences – Allowing people to steal without penalty is very poor management. The biggest complaints employees have about their bosses is that they don’t holding workers accountable and bad follow through, “Everybody’s allowed to get away with stuff. No one ever gets fired or punished.” Honest employees want to work in safe, fair, honest environments.
– Related Article: Don’t Be the Victim of Embezzlement –
Employees will steal from their employers. It’s not a matter of “if” it’s a matter of “when and how”. A small business owner who has never experienced theft is the exception, or he just may be in denial. A responsible owner will protect his company and its honest employees by establishing a deterrent strategy. It’s nothing personal, its good business.
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