A few days ago, my car was stolen – right out of the driveway. My wife and I suspect it was stolen by the employee of one of our service providers who was working at our home at the time of the theft. This led me to think about our own business, and your business, and how we as business owners can go about managing the risk of employee theft.
Why Do Employees Steal?
Ultimately, I think this comes down to three key factors. The first is an obvious one: financial pressure, be it due to gambling and other addictions, or something more altruistic such as the need to care for an ill family member. If an employee feels they cannot confide their hardship, or that that confession will fall on deaf ears, they may be driven to theft.
If financial pressure is the motivation, then the next factor is the enabler: opportunity. This boils down to trust, and whether someone has unsupervised access to valuable goods or information. For example, when our car was stolen, I was at work and my wife was at home but upstairs. There was ample opportunity for the service provider to rummage through our drawers and find our spare car key.
According to the experts, most people that commit fraud see themselves as victims of circumstance. No doubt, the person who stole our car rationalized their decision (the third factor) in order to justify their actions. If an employee thinks they are underpaid, they may consider the theft their “just deserves.” Perhaps, our thief’s rationale was that selling our car would enable him or her to do something worthier, even nobler, with the money, so “the ends justify the means.”
How Can Theft be Prevented?
My wife and I run a bookkeeping company. Now, many bookkeepers have access to their clients’ bank accounts, and the world is rife with horror stories of fraud and theft in the financial industry – bookkeepers and brokers, and the like, stealing from their companies and from their clients.
We’ve heard the stories, too, and the integrity of our company, as well as the safety and trust of our clients, is of paramount importance to us. To eliminate the opportunity for theft, our policy is that we never have access to our clients’ bank accounts. If they want us to pay bills, we use a third-party service that allows us to initiate payment, but requires the client go online to give final approval.
We also try to address feelings of financial burden by maintaining constant communication with our associates. We regularly ask probing questions, such as how they feel about compensation and their quality of life. By showing care and interest, we build trust. It keeps us aware of what’s going on in the lives of our associates, and hopefully makes them less likely to keep their hardships a secret, or to see themselves as a victim.
What You Can Do Today
As clients, we were extremely disheartened that an associate of a known and trusted service provider chose to steal from us. As business owners, we’d be mortified if one of our employees similarly violated a clients’ trust. But, we also understand the challenge that our service provider and other business owners, such as yourself, face in tackling this issue.
Ask yourself, are you managing the risk of your employees stealing from you or from your clients? Have you even thought about it? If you haven’t, here are three actions you can take to start this process:
- Have a deep conversation with each of your employees. Start with one employee today, and another tomorrow. Keep going until you’ve spoken to everyone, and then repeat. Demonstrate your attention and care not only for what they do, but also for who and how they are. Ask if they are enjoying their employment, if they feel like there are being treated and compensated fairly, and if they’re facing any pressures at work or in life that are overwhelming.
- Think through your entire workflow. If you were an employee working for you, what opportunities would you have to steal? Go step by step, identify areas of risk, and put processes in place to manage or eliminate those risks.
- This one is tough, but if you can be honest about it, it will be invaluable. After you’ve identified opportunities to steal, ask yourself what rationalizations or justifications you might make for that theft if you were an employee? Figure out what disgruntlement underlies that rationalization and address it.
There are plenty of other things to consider. How do you heal the relationship with your client if a theft does occur? How do you guard against theft without making employees feel distrusted? These are relevant and valuable questions, but I firmly believe that addressing the motivation, opportunity and justification of employee theft will help you find solutions suited to your business.