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How to Prevent Theft in the Workplace: Essential Strategies and Tips

Conal Yarwood-Frost
14 Apr 2023

If the proper precautions aren't taken, workplace theft can happen at any time. With this in mind, businesses should do all they can to ensure employees don't feel the need to steal. Large and small businesses have different security measures that they can take that can tackle different types of theft in the workplace.

The best way to prevent employee theft is to be proactive and stop it before it happens. In this blog, we'll be exploring the topic of employee theft in detail. We'll define different types of employee theft and how you can prevent it happening in your business.

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What is employee theft?

Simply put, employee theft is when an employee or contractor steals or misuses assets from the business they work for. Assets can mean anything from physical inventory or money to more conceptual items like a top secret manufacturing process. The popular fast food restaurant chain KFC has even taken former employees to court after they allegedly stole the secret recipe to their fried chicken coating!

Employee theft can happen at any level of the business, which means that preventing it can be difficult. It's one thing to catch a disaffected cashier skimming off the top of the till; it's another to catch a senior executive diverting business funds on an industrial scale.

Why do some employees steal?

Theft in the workplace is an uncomfortable topic for both the employees and the business owner. Understanding why an employee may choose to steal is an important part of preventing it.

It should be noted that every case of theft is unique, and an employee may have their own specific reasons for committing theft. Below, we've included a list of reasons why an employee might decide to steal.

  • Financial difficulties - Over the last couple of years, the cost of living has gone up while wages have stagnated. Even the best-paid employees have felt the squeeze, which may motivate them to pursue extra cash wherever they can.
  • Personal instability - Employees, even employees who commit theft, are people with lives only comprehensible to them. Instability in their lives outside of work, such as unexpected bills, can turn the most well-meaning people into potential thieves.
  • Unsatisfied or upset with their employer - If an employee is upset with their employee, they may see theft in the workplace as a way to "get back" at the source of their annoyance. Demotions, poor reviews, and reduced hours could all lead to disaffection.
  • Unhappy with their pay - If employees feel that their work is undervalued by their employer, it's not a huge leap in logic to start stealing to "make up" what they feel they are owed.
  • Don't think that theft harms the company - Larger businesses need to make their employees feel valued, and not just a cog in the machine. It can be easy for the employee who doesn't feel valued to rationalize their theft as "harmless" as the company is too big and faceless to notice.

Different types of workplace theft

Employee theft can be split into two categories: high-level and low-level. The clue is in the name: high-level theft occurs in the higher levels of the business (and often concerns much more serious crimes than simple theft), while lower-level theft happens at junior or entry-level.

This blog is mainly concerned with low-level employee theft as it is easier to detect and prevent. Below, we've included some examples of the many forms of low-level employee theft.

Stealing cash

This is perhaps the most obvious form of outright theft committed by employees. Often this involves:

  • Stealing money directly from the cash register
  • Overcharging customers during a financial transaction and skimming off the top
  • Committing workplace fraud by falsifying returns

Taking inventory

In addition to cash, employees may also take items from your inventory without paying for them. Employees taking office supplies without permission, such as printer paper, is also theft. While taking office supplies is arguably inconsequential, it can show a lack of respect towards the business, and it is up to you as the business owner to decide where the boundaries lie.

Sharing or misusing confidential information

Whether it's trade secrets or customer lists, every business keeps confidential information. An employee using this information for their own gain is also considered theft. Depending on the industry, this form of theft can be incredibly serious.

Time theft

Time theft occurs when an employee is paid for time they did not spend working. This includes fraudulently claiming overtime, clocking in without working, and spending their working hours attending to personal matters without permission.

Stealing from co-workers

Employee theft isn't limited to stealing from the employer. Theft can also occur when employees steal from their co-workers. This can include stealing from their colleagues' lockers and taking items or money from their wallets and bags.

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How to prevent employee theft

Left unchecked, employee theft can have a hugely negative effect on business. In extreme cases, it can even lead to business bankruptcies. Large and small business owners alike have several options when it comes to preventing employee theft.

Most employees don't steal, so it's important that you strike the right balance with your theft prevention techniques. No one wants to feel like they've been accused of something they haven't done. Ironically, if you're too heavy-handed in your theft prevention, you may drive some employees to steal out of resentment!

Below, we've compiled a list of some ways you can prevent employee theft. By implementing some of these techniques in your business, you can prevent employee theft before it happens.

Create a positive work environment

As we mentioned above, if an employee feels like they are a valued member of your team, they are less likely to steal. Building positive professional relationships with your staff takes time and care but will pay for itself over the long term.

Start by sitting down with your team and listen to their feedback on how you could improve the business. Welcome big and small ideas. Collaboration helps employees feel like they have more stake in the business and this will make them want to see it succeed. You can even reward employees for good suggestions. It’s then your role to implement, or at least work towards, some of these changes. 

If you can’t implement all changes immediately, explain this to your team, and share an estimated timeline of when they can expect to see changes adopted. This will go a long way in helping build trust and collaboration, making your work environment a better place for staff.

Another good way to deter theft while building a positive work environment is to offer adequate pay. The better paid an employee is, the less reason that they will have to steal - and you’re more likely to retain your hardworking staff too. Regularly look up the average pay for your employee’s role, in your area, so you know how much your team should be paid.

Include background checks in your hiring process

Background checks allow you to weed out potential thieves before they join your business. With a background check, you can see whether the potential employee has committed theft in the past.

Background checks can be done quickly and simply. In many cases, you can just google the candidate's name and see what comes up. You should also ask your candidates to provide at least two references that you can call to see what kind of worker they were in their last position. Make sure you do this for every new staff member to join your team.

Monitor your employees

Many businesses, especially retail ones, use surveillance to keep tabs on their employees. Monitoring staff during work time can include:

  • Emails (including senders and recipients)
  • Internet use
  • App usage
  • Computer screen monitoring
  • Webcams
  • Keystrokes counting
  • Telephone use 
  • CCTV and video surveillance
  • GPS vehicle tracking
  • Access badge location tracking
  • Searching bags and lockers

(This is not an exhaustive list, though!)

Some businesses use surveillance systems such as security cameras to supervise employees closely. If you do decide to use security cameras, make sure they're placed in areas where they can be most useful, such as above the till. (Remember that it’s illegal to place surveillance, even if visible, in areas of privacy.) 

There are a range of laws that can apply to monitoring your staff. Depending on your region, you will need to check the law to make sure you comply. This could include if you legally need to tell your employees if they are being monitored, if you need to post signage, and if you need the employee to sign a receipt of notice. 

We recommend you always tell your staff, as video surveillance at work can be a touchy subject for some employees. If you do decide to monitor your employees this way, make sure you sit down with them and explain your reasoning. You're not accusing anyone; you're just looking out for the business's best interests.

You may also need to create a workplace monitoring policy, outlining when you monitor staff, why monitoring is in place, how the collected data will be used, and who the information is disclosed to. Best practice is to make sure your staff are alerted to any changes you make to the policy, and to provide regular training to staff who are receiving the monitored data.

Be proactive

Preventing employee theft requires you to be proactive in tackling the problem. Take a look at your business and identify areas in which theft may occur. Have you noticed any suspicious activity? Have you heard any complaints from terminated employees? Are there any potential security risks in the way you process transactions?

If you find any of these issues in your business, you should take steps to fix the problems. Surprise audits can identify issues before they happen.

You should also encourage your other employees to anonymously report suspicious activity if and when they see it. If you have doubts about one employee, protect devices and restrict access to important processes until they prove themselves to be trustworthy.

Institute a no-tolerance policy

Theft and fraud are serious issues at any level. By ensuring your staff understands that you have a zero tolerance policy to workplace theft, you can prevent theft before it happens. Lay out exactly what will happen if they are caught. The threat of a police report can go a long way!

A secure, safe POS

Small business owners should have security at the core at what they do. From the cash register to the card reader, you should be fully assured that your business is protected.

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