Theft Prevention: Minimizing Impact of the “Inside Job”

May 28, 2010 by · Leave a Comment  

As defined in the criminal law – theft is the illegal taking of a property without freely-given consent. Theft has probably been around for as long as the human civilization.

Today, in the 21 century, theft is very much alive and kicking. There is so much more to steal today than even 20 years ago. With the invention of the internet theft found another handy instrument or channel to support its never ending hunger for things that belong to someone else. I bet that at some point someone is going to copy this blog and post it on their website because it’s going to help their pay-per-click campaign. You are welcome! I’ll probably never find out anyway.

In recent years with many technological innovations, research and scientific advancements, businesses are able to implement various measures to prevent theft in their organizations. Most common acts of theft are stealing physical property, intellectual property and copyright infringement.

The retail industry has been one of the most effected by theft. In retail, theft has been as much of an issue with shoplifters as it has been with employees; as a matter of a fact according to 2006 National Retail Security Survey shoplifters represented 31.6% of  the “shrinkage” where employee theft represented staggering 46.8%.

I guess using the term “inside job” would be ironically appropriate in that case.

Assuming a total shrinkage dollar amount of approximately $37.4 billion, this translates into an annual employee theft tag of $17.6 billion. This is a staggering monetary loss to come from a single crime type.

According to the department of justice nearly one third of employees commit some degree of employee theft. Some experts have found that one-third of all new businesses fail because of employee theft and approximately two percent of all business sales are lost to employee theft as well.

Looking at these statistics someone would be wondering what kind of measures retailers are taking to prevent the “inside job”. The short answer is: in most cases they do nothing.  That is besides installing video surveillance systems that in recent years changes from your old VHS tapes to more sophisticated digital recorders.

However due to a high turnover and often lack of standardized interview screening system employers in retail industry simply hire people that would never pass the integrity test if they were given one. Credit check has somehow been linked to the employee integrity however someone’s unpaid bills in the past don’t exactly represent their attitude towards theft today.

Structured interview system and a simple integrity (honesty) assessment that potential candidates can fill out online ($20 – $40 per assessment) could drastically reduce employee theft by as much as 80%.

At the end of the day business owners going to have to make a choice using their calculators. The numbers speak for themselves – unless reasonable measures are implemented – losses will continue to grow.

Written by:

Gary plays a key role in leading and defining solutions to help companies overcome “people challenges” to create productive, engaging and prosperous workplaces. Twenty years of business experience including management and human resources, working with small companies and Fortune 500 firms gives Gary a solid “hands-on” knowledge of the industry. His passion is to promote ideas, solutions and technology that inspire excellence at a workplace and creates positive change. Gary’s primary focus is the development of business solutions to help companies evaluate, select and develop the very best people. In addition to managing a team and overseeing custom program development for the client, Gary works to increase each company’s productivity and employee engagement by implementing wide range of evaluation tools and strong system of support.

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