Is Your Small Business Vulnerable to Employee Theft?

Unless you are a one-man shop, you rely on your employees as essential to your business’ success. Unfortunately, many small businesses are vulnerable to employee theft. Even stealing that seems inconsequential on the surface (theft of office supplies, pocketing the money from a cash sale rather than recording it, or walking off with a T-shirt from inventory) adds up – quickly. Your Massachusetts Business Owners Policy (BOP) protects your business from disasters, employee injuries, etc. Unfortunately, it cannot protect you from hiring dishonest employees. 

Sobering Statistics

According to an article in Security Magazine, nearly 75% of all employee thefts investigated in 2014 involved small businesses – more than half of which had less than 25 employees. Regardless of how the number of  employees or the industry your business serves, employee theft is a very real issue. From bank tellers, accountants, and bookkeepers who pocket cash or redirect it into their personal accounts to sales clerks who steal merchandise to sell on Ebay, the problem is pervasive.

Steps to Prevent Employee Theft

The most important thing you can do to prevent theft is to be meticulous about who you hire by thoroughly screening  applicants. Call references, peruse social media accounts, run a thorough background check, and confirm the information on their application or resume.

If an applicant is dishonest before you hire him or her, don’t trust him or her with your assets. For existing employees, make sure that everyone knows you have a zero-tolerance policy for theft of any kind. Make sure employees know you will not only fire someone caught stealing – you will report the incident and press charges.

Do not tempt an employee by giving him or her unchecked oversight of any aspect of your finances. Separate responsibilities to ensure a system of checks and balances. Most incidences of employee theft come to light when other employees report suspicious behavior or blatant theft. Set up an anonymous reporting system to encourage whistleblowers – or, offer cash rewards for anyone providing information about employee theft. 

Running a small business can be personally and financially rewarding, but you’ve got to take steps to reduce your risks. From an insurance perspective, consider Metro Boston Insurance Agency, 617.884.5480, a trusted ally. We are here to help you succeed.