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Employee Theft

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You have assembled the best crews and taken great care in employing honest, loyal workers. You know all your “guys” are on the up and up, so why should you be concerned with employee theft? Because, according to the U.S. Chamber of Commerce, three out of four of your employees will steal from you this year.

One of these people will steal repeatedly, or has already done so. Businesses with fewer than 100 employees suffered the greatest percentage of employee theft; they are particularly easy targets because they have far fewer anti-theft controls in place. When the economy is in recession, employee theft greatly increases.

Business theft comes in many forms. It can be as simple as an employee taking a few paper clips, an ink pen, paper or stamps. In the field, it is very easy for an employee to pocket a tape measure, hand tools…even a sprinkler head.

But don’t put it past employees to take larger items too, such as small power equipment, seed, plant material or fertilizer. It doesn’t take someone very long to transfer any of these items to their truck when the workday is complete. Mowers or leaf blowers are more difficult to take, but not impossible.

If employees have access to any of your company’s tools, supplies and equipment, be assured, they can be taken. A single employee can quickly reduce or eliminate your profits immensely. And if more than one is stealing, watch out.

Sarah Hermes, third generation at Hermes Landscaping in Lenexa, Kansas, says, “The reality is, if someone wants to steal something and they are knowledgeable about how the company operates, then they will. We have a large company that has been in business for more than 50 years, and we know for a fact that trucks, loaders and equipment, as well as cash, have been stolen before—and that’s with everything locked up and surveillance cameras in place. It’s inevitable in this type of business.”

If you don’t monitor theft and allow it to continue, your business will have a one-in-three chance of declaring bankruptcy or going under, according to the U.S. Chamber of Commerce. If there’s a lack of control over inventory and preventive measures do not exist, you are creating a very high probability that your employees will steal.

Imagine this simple scenario: One of your crew members needs to borrow a wrench for a home project. You are too busy to ask, so he helps himself to not only a wrench, but a couple of screwdrivers and a pair of pliers, and puts the items in his personal toolbox.

He plans to tell you later and return them the next day, but somehow he forgets to say anything about it and doesn’t bring them back. Was it by accident or intentional? Does it matter? It happened, and now your supply is a couple of tools short.

Here’s another sobering statistic: An average employee steals ten times more than the average shoplifter. Ask yourself how much it would take for your company to recoup these lost costs? Not to mention the time and energy it takes to replace these stolen items.

An employee’s motivation could be for their personal use, to sell the item or to use it on another job. But most of the time, employees steal from their employer not because of need, but rather because an opportunity to steal presents itself. Employees could also steal for emotional reasons. If an employee feels that the business has wronged him or he is being underpaid, he is more likely to steal.

One area of employee theft most owners don’t think about is theft of time. Surprisingly, the cost of time can quickly add up to as much as an employee stealing material objects— sometimes more. If you have one crew member who is consistently late, your entire crew is affected and falls behind before the day even starts.

Or perhaps, before the job your crew stops to get doughnuts and coffee, eating up precious work time.

Five minutes wasted here, ten minutes wasted there; before you know it time flies by and thirty to forty minutes have disappeared from the workday.

Have you ever considered the time wasted when employees use smartphones or tablets on the job? Texting and viewing social media has become a part of daily life. Technology allows us to take a quick glance at bits of information. Our gadgets even alert us when we have received new information, such as a text message. How many employees do you know who won’t take a peek when they get that alert, even if they are on the job?

However, it’s not the quick look at a text, Facebook page or daily news that quickly adds up in time. It’s taking that next step and texting back.

Let’s take a look at how small amounts of time can add up. Say you’re paying your crew members $20 an hour each, including the labor burden. One of those employees spends five minutes viewing his smartphone five times a day. This non-productive time adds up to 100 minutes a week, which is an hour and forty minutes of lost time.

For 100 minutes of non-productive time, you just lost approximately $35 a week. Do that every week and it comes to $140 a month. That times 12 months is almost $700 lost per year. Now multiply that by the number of employees you have— let’s say 20—and all of a sudden there’s $34,000 per year in non-productive time. That’s a lot of money for most companies to lose.

A perfect example of this is when Tamatha Blanchard, president and owner of Homestead Landscaping in Bondville, Vermont, posted the company’s Facebook page. “We put the page online at about 8 a.m.; our guys leave the shop by 7. By 8:15, I already had two of our employees, who were out working in the field, friending us.”

Blanchard is taking a hard look at how to handle time as it pertains to cell phone usage on the job. “I have to wonder how much less productive we may have become as a workforce, due to the amount of time that we spend on our cell phones on the job. It’s a problem, because all of our work is outside of our facility and we use cell phones to communicate with our guys,” she says.

One solution is to eliminate cell phone use, or have clear rules in place regarding when employees can and can’t use their cell phones. “But it’s still a sticky situation and I don’t know yet how we’re going to handle it,” admits Blanchard. Smartphone and tablet time theft is an issue employers will have to deal with in order to protect their bottom line.

The good news is that there are several things you can do to help stop or deter theft in the workplace. Remember, preventing losses starts with you—it’s your business. If employees know there’s a monitoring system in place, it will deter them.

To cut down on dishonest employees initially, make sure to screen them. Brad Gilbert at Walters & Associates Landscape in Rome, Georgia, says, “We do a drug test, then a background check and we check references to follow-up.”

“It has not been a very big issue with us in the past five years,” Gilbert says. “One of the reasons is that we try to make them aware of the consequences and the negative impact it has on the company and to the bottom line.”

“Our personnel, which includes the design team, the field staff and the maintenance crew, go through a training program. We make it clear upfront and in the employee handbook what is company property and what is to be used for company purposes. That includes phones and cameras, as well as electronic devices.”

Another way to screen employees is by doing a simple check on the Internet. Just by typing in a prospective employee’s name, you can reveal some crucial information. These screenings can expose other integrity problems.

People who are more inclined to steal possess other behavioral problems, such as tardiness, laziness and having others do work for them. You’d want to stay away from employing such people, obviously.

You can always be more careful regarding your inventory and supplies. Count and verify items delivered to you with the packing slips.

Any variation to what was delivered and ordered should be addressed right there on the loading dock, before it is accepted or signed for. Reduce the amount of employees with access to your inventory.

Around your business and particularly in your yard, use surveillance cameras that provide 24-hour monitoring. This allows you to supervise employees’ actions and prevent theft. Employers can also install GPS tracking devices on vehicles. Using GPS will help eliminate the occurrence of employees running personal errands on company time and company fuel.

Make sure all materials are under lock and key at all times, including large equipment. If necessary, use cable and lock systems, and always lock entrances. Unfortunately, this doesn’t guarantee that your equipment won’t be stolen. Just remember, one careless employee who forgets to lock up the equipment leaves the door open for theft. It is best to limit key access to the smallest number of employees possible.

Hermes said, “More than the preventive methods in place, it’s about the culture you create. We really care about our employees and respect them as individual people. It begins with the type of people you hire. We have hired ex-convicts and they have turned out to be really incredible. We believe the reason it has worked is because we truly try to make this company feel like a family.”

“We employ Mexican workers through the H-2B program and have had them say, ‘I don’t have a family; this is my family.’ With this type of culture, we believe that they’re not going to steal from family. We try to create an environment that they can believe in, feel safe in and be respected.”

Even with precautionary measures, do you still think it won’t happen to you? Then remember what most people say when they discover that someone had been stealing from them: “I had no idea; he seemed like such a nice guy.”

 
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