Lessons from Other Industries: Protecting from employee theft

Restaurant Kitchen and Staff

Photo Credit: SMcGarnigle, Flickr

By Jonathan Sweet
September 13, 2013
Filed under Features, Top Stories

Employee theft is a big deal. In both amounts large and little, small businesses lose an estimated $600 billion a year, according to the National Federation of Independent Businesses.

A recent study in the restaurant industry points to the impact that closer supervision and surveillance of employees can have on reduced losses and increased revenue. For the study, software that monitors employees was installed at 392 restaurants across the country.

You can read the full 47-page PDF here, but the key takeaways were that theft alerts from the software resulted in a 22 percent decline in identifiable theft and revenue increased by nearly $3,000 a week per restaurant or about 7 percent.

The psychological effect on employees of knowing they were being monitored was the most important thing, the authors said. With that in mind, they were less likely to give away free drinks, etc., in exchange for larger tips as one example.

Going to the point of monitoring your employees constantly may not be the solution depending on the size and scope of your business, but here are some other steps you can take to protect your business:

  • Monitor the finances – Make sure you know what is going in and where the money is going
  • Keep your employees happy – Most employees that steal report that it is because they feel underappreciated or underpaid
  • Track petty cash and small non-cash items – Small office supplies are the most commonly stolen items. For example, 82 percent of employees admit stealing pens or pencils from the office. One in five employees admit stealing scissors, paper, staplers, etc.
  • Require multiple signatures – Make sure one person cannot write big checks (or even multiple small ones) by themselves
  • Set the rules – Make it clear what the expectations are regarding “borrowing” items from the office or shop
  • Conduct regular audits – Some people become very good at hiding their tracks. Hiring someone to check the books may help uncover problems before they get out of hand


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