Employee theft and fraud are uncommon, but they aren’t nonexistent. Your business may go for years or decades with no instances of theft or fraud – but these events can occur at any time.
Protecting your business against theft and fraud doesn’t mean you don’t trust your employees. It means that you’re interested in building a strong business that meets compliance standards, offers clear policies and procedures, and keeps everyone safe.
Employee Theft and Fraud Statistics
Employee theft and fraud can take many forms, from stealing office supplies or inventory to embezzling funds or stealing business opportunities.
Small businesses are especially vulnerable to the negative effects of employee fraud or theft.
- Employees are 15 times more likely to steal from employers than non-employees, according to the National Federation of Independent Businesses (NFIB).
- About 44 percent of store thefts can be traced back to employees.
- One in every three small business failures results from employee theft or fraud, according to the US Department of Commerce.
These numbers raise concerns for business owners, and rightly so. Yet businesses can take steps to avoid becoming one of these statistics.
Steps to Protect Your Business from Theft and Fraud Issues
To protect your business from employee theft and fraud:
- Start with safe, secure procedures. Create clear policies and procedures for handling items of value. Train employees in the “right” way of doing things from the start.
- Screen for trustworthiness when you hire. Ask interviewing candidates about how they’ve handled money or inventory in the past. Consider implementing background checks.
- Randomize your audit schedule. It’s easier for would-be thieves to cover their tracks when they can predict upcoming audits. Perform audits randomly to catch suspicious activity as it happens.
- Create an anonymous reporting system. Employees may hesitate to report their co-workers’ or supervisors’ misbehavior if they think the report can be traced back to them. Create an anonymous reporting system to help your honest employees keep their colleagues on track.
Does your business have the protection it needs?
Your business faces a multitude of threats. Building a strong defense can be complex. To ensure your business stays as protected as possible, consider working with Odell Studner. We’ll help you identify the insurance coverage and other support you need, so you can prevent losses and mitigate risks that do occur. Contact us today to learn more.
