How to Stop Theft in the Workplace

How to Stop Theft in the Workplace

Canadian business owners know all too well the pain and frustration of having an employee steal from them. For those in retail, nearly 19% of loss comes from internal theft; this costs Canadian retailers $3.6 billion per year.  Knowing how to stop theft in the workplace is critical for every business owner, regardless of industry, to prevent hard-won revenues from walking away.

What is Employee Theft?

It’s probably no surprise that employee theft involves a person who you’ve hired to work for you steals from the place of business. However, that’s just scratching the surface of what employee theft can truly encompass.

There are numerous ways employees steal from their employers. These methods vary based on the industry, product availability, and potential opportunity.

Theft in the workplace statistics to know:

  • Staff theft accounts for 18.4% of retail loss per year
  • An employee will steal $2500 from an employer before getting caught
  • Employee theft costs Canadian businesses $1.4 billion annually
  • 75% of employees have stolen, at least once, from an employer

“No matter how much a business owner trusts their employees, they have to look at the facts surrounding employee theft and realize they are at risk for this type of loss. It’s vital all businesses consider implementing security measures that prevent employee theft – as well as identify it when it occurs.”

Bryan Kelly, Executive Vice-President & GM at Logixx Security

Inventory Theft

Inventory theft refers to the unauthorized removal or misuse of items from a company’s stock, often leading to financial discrepancies and operational challenges. This form of theft can manifest in various ways, from subtle misappropriations to blatant pilfering.

Examples of inventory theft include employees taking office supplies for personal use, misreporting quantities of sold items to pocket the difference, or directly stealing merchandise from a warehouse or store.

Industries and entities affected by inventory theft:

  • Retail Sector: Especially vulnerable due to the vast array of products.
  • Warehousing and Distribution: Large storage areas can be targets for theft.
  • Manufacturing Industry: Theft of raw materials can disrupt production.
  • Pharmaceutical Companies: High-value drugs and medications are often targeted.

Stealing Cash

Stealing cash refers to the unauthorized taking of money from a business, often done discreetly to avoid detection. This act not only affects the financial standing of a company but also erodes trust within the organization.

  • Skimming: Taking money from sales before they’re recorded.
  • Petty Cash Misuse: Misappropriating funds from the petty cash drawer.
  • Fake Expense Reports: Overstating expenses or inventing costs to receive reimbursements.

Owners across various industries face significant challenges due to cash theft. Beyond the immediate financial loss, it can lead to increased operational costs, the need for rigorous audits, and a potential decline in employee morale.

Stay up-to-date on business security trends – read the Logixx Security blog:

Payroll Theft

Payroll theft is the act of employees or administrators manipulating payroll systems or timesheets to receive unearned wages. This deceptive practice can lead to significant financial losses for businesses.

Examples of payroll theft include “buddy punching” where an employee clocks in for an absent colleague, inflating hours worked on timesheets, or unauthorized alterations to pay rates.

The repercussions of payroll theft are felt across all industries. Beyond the direct financial strain, it can erode trust within teams, necessitate costly audits, and lead to increased oversight and administrative burdens for businesses.

Data Theft

Data theft involves the unauthorized access, copying, or distribution of confidential information, often for malicious intent or personal gain. This digital pilfering can compromise both individuals and businesses.

Primarily, data theft affects companies holding sensitive customer or employee information. However, individuals can also fall victim, especially when their personal details are exposed.

Why data theft is so tricky:

  • Sophistication: Modern theft methods are highly advanced.
  • Anonymity: Perpetrators can hide their identities online.
  • Rapid Spread: Stolen data can be distributed quickly.
  • Delayed Detection: Breaches might go unnoticed for extended periods.

Examples of data theft include phishing scams to gather personal credentials, unauthorized database access by employees, and malware attacks that extract confidential business information.

Employee TheftSource

Time Stealing

Time stealing is when employees misrepresent the hours they’ve worked for their company. It also includes time spent in non-work-related activities while on the clock. Simple examples include taking longer than allowed lunch breaks or leaving work early. It’s often a subtle form of theft that can lead to hundreds of lost hours if left unchecked.

However, detecting time stealing is challenging for employers. This is because it often manifests in seemingly innocuous ways, such as executing small personal tasks or phone calls during work hours. Most of us have been guilty of time stealing at some point in our working career and probably don’t know it’s a form of theft.

Yet, for Canadian businesses, time stealing is real. It  leads to decreased productivity, increased operational costs, and potential revenue losses. Over time, it can erode workplace morale and trust, impacting the overall efficiency and culture of the organization.

Theft of Services

Service theft is a type of theft that occurs when an individual uses, or receives, a service at their company when they did not have permission to use it. Many employees may feel this behaviour is justified because “they deserve it”, however, It’s a deceptive act that deprives businesses of rightful compensation for services rendered.

Examples of this type of theft can include service theft:

  • Use of Company Resources for Personal Projects: Examples include using company tools (think printing resources, data usage, or proprietary software) for personal use or financial gain.
  • Unauthorized Use of Premium Services: Taking advantage of a company by using their paid subscriptions or online services for personal use without consent.
  • Discounts Abuse: Applying employee benefits for unauthorized individuals or purposes, such as giving the discount to a friend when the discount is just for the employee and their immediate family.

Service theft and discount abuse results in significant revenue losses for companies every year.

Stealing From Your Company

7 Ways to Prevent Employees From Stealing From Your Company

1.Advanced Surveillance Systems

Surveillance systems are electronic security solutions that monitor and record activities within a specified area of a workplace. They help to deter suspicious activities and provide evidence if employee theft or other criminal behaviours occur at a place of work.

Examples of surveillance systems include:

  • CCTV Security Systems: These are security cameras that you see in most workplaces and can be used to monitor people indoors, outdoors, or anywhere you need on your property.
  • Access Control Systems. These are systems that track when employees (and other people granted access) enter and exit a workplace. It can also deny people who don’t have the right access privileges.
  • Remote Guarding. This is the next level of video surveillance systems. With remote guarding, business owners hire security professionals to monitor their businesses security feed for them and do so from a remote location.

Each of these systems play a pivotal role in deterring employee theft. With constant monitoring, employees are less likely to engage in dishonest activities, knowing their actions are being recorded.

2.Strengthen Hiring and Onboarding Processes

Effective hiring and onboarding processes are a great foundation that owners can use to prevent internal theft. By selecting trustworthy candidates and instilling company values from the outset, businesses can significantly reduce the risk of dishonest activities.

Some tips to better loss prevention strategies through the hiring process are:

  • Do Thorough Background Checks: Ensure potential hires have a clean record and also speak to their references.
  • Clear Communication: Clearly express internal theft policies – and the consequences of not adhering to them – early in the hiring process. This will let a new hire know they are being monitored and what to expect if they’re caught stealing from work.
  • Regular Training: Continuously educate staff on loss prevention strategies and the importance of integrity. Share what seemingly “harmless” thefts look like and how it hurts the company.
  • Open Feedback Channels: Encourage new hires to ask questions and voice concerns, fostering a transparent environment from day one. Let them know what process to follow if they suspect another staff member of theft.

By implementing these measures, companies can create a culture of trust and accountability, deterring potential theft before it even begins.

3.Implement Robust Cybersecurity Measures

Businesses, regardless of their scale, are not immune to cyber attacks. The digital landscape has made it so that even the smallest of enterprises can become targets, employees with malicious intentions need less than you might think to exploit a company’s digital footprint.

For instance, an individual may leverage their access to a company’s confidential databases, and discreetly extract proprietary information from it. Next, they may sell this data or use it for personal advantage.

To fortify against such internal threats, companies must establish stringent access controls that ensure only those with a genuine need can access sensitive information. Regular audits of digital activities can help in early detection of any suspicious behavior.

Moreover, continuous training sessions emphasizing the gravity of data security and the repercussions of breaches can instill a sense of accountability and caution among employees.

Employee Theft

4.Adopt Cashless Transactions

Cashless transactions can significantly curtail employee theft. That’s easy to understand, as without tangible cash to handle, the opportunities for stealing cash are drastically reduced. Cashless payments also ensure greater traceability and transparency in a business’s financial flow.

Examples of cashless solutions include digital wallets, credit and debit card payments, and online bank transfers. Additionally, implementing Point-of-Sale (POS) systems that integrate with digital payment gateways can further enhance transparency and make it challenging for employees to manipulate transactions.

5.Perform Regular Security Audits

A security audit is a systematic evaluation of an organization’s security measures and risks that’s done by a security expert. They are critical for identifying security vulnerabilities and building an effective plan to mitigate security issues, such as internal theft.

Regular security assessments help businesses to refine security protocols and update measures that are no longer effective. This not only deters potential internal theft, but also reinforces a culture of accountability and transparency within the workplace.

In Canada, work with a security company with the right skills, comprehensive knowledge base, and proven experience in assessing business security risks to get the best insight. Once you know what risks you face, they can help you design and implement the ideal system for your risks, business goals, and budget.

6.Foster Transparency in the Workplace

Workplace transparency refers to the open sharing of information, decisions, and feedback within an organization. An environment where actions and decisions are visible and understandable, deters employees from stealing, as they recognize the increased likelihood of their actions being noticed.

Tips to foster transparency at work are:

  • Open Communication Channels: Encourage employees to voice concerns and ask questions.
  • Hold Regular Team Meetings: Use these meetings to connect and engage your team as well as update staff on company performance, goals, and decisions.
  • Accessible Management: Ensure leaders are approachable and are willing to discuss concerns and answer questions their staff may have.
  • Clear Reporting Systems: Implement systems where tasks, progress, and results have assigned accountability and are visible to relevant parties.

7.Physical Security

Physical security measures are classic safeguards that business owners have used for centuries to protect their assets, staff, and premises. Modern examples of physical guard services are:

  • Security Guards: Trained security professionals are present at a location. They provide a visible deterrent to criminals and can respond to safety incidents.
  • Mobile Patrols: Not every business needs a round-the-clock security presence. Mobile patrols do periodic sites visits based on a business’s needs
  • Perimeter Fencing: This is strategic fencions used to secure the boundaries of a facility or an open worksite, such as a construction zone.

By establishing these physical barriers and monitoring mechanisms, businesses create an environment where illicit activities are easily detected. This visible layer of protection serves as a powerful deterrent, making employees think twice before attempting theft.

Lower Employee Theft Risks Today. Contact Logixx Security

Employee theft is an especially hurtful form of revenue loss that happens to most business owners at least once in their lifetime. That doesn’t mean it’s inevitable. With the right measures in place, and security services provider by your side, you can enjoy a work environment that reduces the chances of an employee taking what isn’t theirs.

At Logixx Security, we’ve helped hundreds of businesses reduce internal theft loss, and we can help you too. We offer state-of-the-art electronic and physical security measures that will give you the eyes you need to monitor your employees effectively.

To learn more, contact our team.