Working with your employees all week, year after year, builds a bond; one that is very similar to a familial bond in some instances. With a strong bond and company culture, employee theft may be the last scenario you examine when you are analyzing why business margins are falling. However, any employee is capable of stealing.
The Association of Certified Fraud Examiners' estimates that employees who have been with the company longer and commit employee theft create the largest losses for the business. Although business insurance may help you cover the costs of losses originating from employee theft, you should focus on preventing employee theft using the following strategies.
Look for Signs of Employee Theft
Research indicates that many employees steal because they feel as if they are not being compensated fairly. Additional research suggests that workplace pressures, perceived unethical treatment and issues with management also contribute to employee theft. Fortunately, employees who have a propensity to steal often provide management with telltale signs, including:
By recognizing these signs, you can prevent employee theft before the losses become impossible to recoup and result in a claim on your business insurance.
Install Data Encryption
Limiting access to sensitive data is an effective measure businesses can take to reduce employee theft. Many systems come with some internal layers of protection already, but if you want a comprehensive system, you may have to spend more money on your security system. You can purchase upgrades such as data encryption technology to prevent employees with access from misusing the data. These systems block out sensitive information, such as customer credit card numbers.
Monitoring inventories ensures that everything is accounted for within your warehouse. When you conduct inventory audits on a regular basis, you aren’t simply taking measures to track your inventory, but you are also discouraging employees from stealing.
Audit Financial Systems
One of the most common departments in which theft takes place is the accounting department. Professionals often know how to cover fraudulent transactions in a way that makes them appear valid. Instead of relying on information your accounts provide you, allow a third party to conduct periodic audits to ensure that your accountants are making justifiable ledger entries.
Employee theft can be costly and may result in you filing a claim on your business insurance. You can keep costs low by aggressively monitoring for employee theft and implementing strategies that deter employees from stealing.
Keep your business safe. Call Transworld Insurance Group at 703-591-6668for more information on Fairfax business insurance.