05 Nov How to reduce the risk of losing out to employee theft
In the retail sector, internal theft is the cause of more than 40 per cent of shrinkage costs incurred, according to Russell Zimmerman, Executive Director at the Australian Retailers Association (ARA).
“Internal theft tends to be more sophisticated, has a greater financial impact per incident, and is more difficult to detect than external theft,” Zimmerman says.
As with any business problem, the solution to employee theft involves people, processes and technology.
The best way to prevent internal theft is to do your best to recruit and retain reliable staff.
“If retailers recruit staff with a history of theft because they have not taken the time to interview comprehensively or do reference checks, they have no one to blame but themselves,” says Zimmerman.
This will involve a bit of legwork and homework to begin with, but the pay-off will be worth it.
At a bare minimum, make sure you conduct background and comprehensive reference checks. You should also look for signs of criminal history involving violence, theft, and fraud, civil court action involving debt collections, and don’t forget to check with their previous employer as to why they left the business.
Treating your staff well can also help reduce theft. In fact, academic research shows that there is a link between employee dissatisfaction and theft.
“Treating staff with respect, consideration and trust can at a very human level reduce the likelihood of revenge as a motivation, while increasing the likelihood of staff feeling guilty at the thought of taking advantage of an employer who trusts them,” Zimmerman adds.