If youve been involved in management in the green industry for any length of time, then youve been exposed to employee theft. You may not even be aware of it, but it has probably happened. Hopefully, your experience has been limited to a few paper clips, an ink pen, legal pad, or maybe a few postage stamps. Thats not the real serious kind.
Im talking about workers who steal large quantities of inventory for their own personal use, resale, or for their own side or moonlighting jobs. This person can reduce or eliminate your profitability; or, if youre a small company, ultimately put you out of business.
Your first response is going to be, No, that isnt happening at my company!
Hopefully youre right, but can you be absolutely sure? Do you have strict inventory controls in place all along the process of purchasing, receiving, storing, delivering, installing, and servicing your inventory? Do you ever have times during your busy season when the volume of business youre handling causes you to relax some of your inventory control practices?
Its easy to rationalize, saying, Were too busy right now to waste time with inventory management; well suspend it until things slow down a bit. Have you ever done that? I have, and it has cost me more money than I care to think about.
I know that in this day and age, it is not always easy to acquire and maintain a good workforce. As managers, we are forced to hire some workers who are not the cream of the crop. All of us have had workers who, for one reason or another, were not our first choice. Having to deal with those individuals makes our jobs harder, but it is a fact of life for us.
It is not always easy to determine which of our workers will be untrustworthy. There are employees who you trust implicitly that you might want to re-evaluate. I once had an employee who I thought the world of and trusted completely. Unbeknownst to me, this worker was in grave financial trouble, and resorted to stealing lawn sprinkler parts from our company for resale to other contractors. Thank goodness one of these contractors informed me as to what was going on. Even then I didnt want to believe it, but there was the truth staring me right in the face.
Rather than trying to rely on human judgment as the determining factor in how you gauge your workforce, eliminate as many tempting situations from all employees wherever possible. Yes, you have to have some employees who have access to inventory, but make absolutely sure these folks are on your side. Even then, there are further steps to take to protect your products from the time you purchase them until you sell or install them on your customers property.
Receiving; When inventory is delivered to you, it is absolutely essential that these items are counted and verified with the packing slip. Any variation in what was delivered as opposed as to what was ordered should be addressed right there on the loading dock, before you accept or sign for anything.
Storage; All materials should be under lock and key at all times. Access to these storage areas should be limited to the smallest number of employees as possible. The one exception to this is, obviously, plant material. These items must be outside and accessible by not only workers, but sometimes customers. This is not to say that you cant have fences and gates, with people monitoring the flow of products out of this area. Ill also address another idea for these areas later.
Delivery; The delivery of products to your customers can happen in a number of ways. Plant material may be delivered to a customer who will plant it themselves, or it may be taken out by a crew who then plants it for the customer. You may also have lawn care crews who apply fertilizer or weed control directly to the customers lawn. You may have irrigation crews and service technicians who have a standard inventory of lawn sprinkler parts on their trucks at all times. These situations present the most difficult monitoring of your components, because it is no longer physically under your control.
It is in these situations that I believe most thefts occur. How can you control or limit your exposure? First off, you must have a paper trail of products leaving your facility that documents their journey from your warehouse to the final disposition of them at your customers property. Secondly, the employees responsible for these products, after they depart your facility, must be accountable for their care. You need to check with the laws of your state and municipality as to how far you can hold your employees financially and legally responsible for those products. Again, an accurate paper trail will be necessary for any legal issue arising from loss of your products by an employee.
Having touched on the basic procedures necessary to protect your inventory, are there other ways you can improve your odds? Surveillance cameras are becoming more and more necessary as a vital component in your loss prevention plan. Twenty-four hour, seven day-a-week monitoring of key areas will give you a much better perspective as to what occurs at your facility, whether you are there or not. There are many new digital systems that can provide views of all your key areas.
I would recommend cameras at all entrances to any locked or gated area where parts or products are stored, at all entrances to nursery or garden center plant material areas, at all loading areas, and at roadway entrances to your facility. Although we havent addressed tools in this article, cameras at all tool lockup areas and storage areas should reduce the chances of items being stolen from there as well.
Another area that needs to be addressed is your gasoline/fuel. With prices skyrocketing, proper monitoring of your fuel tank facility and consumption by vehicles should be carefully monitored. A camera in your fuel area might eliminate the temptation for someone to gas up their own vehicle when no one is around. Monitoring fuel usage by company vehicles is also a good idea.
While on the subject of vehicles, I have used GPS trackers on company vehicles for several years and they are worth their weight in gold. Trackers virtually eliminate the possibility of a worker using a company vehicle for any unauthorized use, from running a personal errand to doing moonlighting jobs. They can also be a great job-costing tool because you know to the minute how long a vehicle was at a particular jobsite. They are also great for locating your vehicles, in case of an emergency.
Now that weve covered how to protect your business from theft, suppose you do catch an employee stealing from you. What should you do? Each individual case is different, as are the laws of all states and municipalities.
Obviously, the very first thing you have to do is terminate the worker. From that point on, I would recommend seeking the advice of an attorney and your local police, as to what, if any other course of action should be taken. It has been my experience that most local police departments do not want to pursue most theft cases, unless there is absolute, iron-clad, documented proof and witnesses to the crime.
I would also caution you to speak with your attorney before any accusations are made that might get you on the wrong end of a slander or libel suit. It has been my experience that the best course of action is to remove that employee from the work environment as quickly as possible, then get back to all your other responsibilities.
If you do all these things - choose the best employees, secure your inventory, monitor it as it goes from your warehouse to your customers property, and track it with an accurate paper trail - then you should be on your way to reducing or eliminating employee theft.
Editors Note: Mike Hawkins is a project manger for West County Sprinklers, Inc. of St. Louis, MO. He has been in the irrigation and landscape business for thirty-two years.