HAVE YOU EVER HEARD THE SAYING, "The road to hell is paved with good intentions"? Here is a scenario to think about: two weeks ago, one of your crew members came to work and realized that his car was running on fumes, but he didn't have any money in his pocket to buy gasoline. He meant to ask you if he could pump ten gallons from your gas storage tank in the back, thinking he would reimburse you on payday. Somehow, he forgot to ask you and by the time that evening came and he was ready to leave, you were already gone. He decided to go ahead and fuel up anyway.
Last Friday was payday. He seemed to forget, and he never paid for the gas. Was this intentional or was it truly an oversight?
As an employee, it is implied that when you take a job, you'll be loyal to the company that hired you, but, according to the Justice Department, insider theft is growing at a 15% annual rate and the dollar amount is rising. What can be done to stop it? There are a number of procedures that should be implemented. It most likely won't end theft but it will help, especially if the employees know that there is a monitoring system in place.
According to a study done by the Department of Commerce, one-third of all employees routinely pilfer from their employers, and more than 80% have done it at least once. It can involve an array of items, anywhere from paper and pencils to tools and fuel.
Hermes Landscaping in Lenexa, Kansas, screens its potential employees with background checks and a handwriting analysis. "I am not the type of person who is going to over-monitor people," says Dalton Hermes. Keeping track of inventory seems tedious, and if potential applicants are screened enough, perhaps the company doesn't have to be overly cautious after they are hired.
Small items are pilfered more often than big items like machinery, but because it accumulates at a faster rate, it can be just as costly to the company. Take the case of copper wire. Now that the price of copper has gone through the roof, copper wire is a popular item to steal because employees can sell it easily. So is plant material. After being delivered to jobsites, plants are sometimes not signed for, and somehow find their way onto an employee's property or perhaps a job he might be moonlighting. If you allow this to happen, it will be a common occurrence. Done often enough and seemingly so minor, it's thought of as one of the benefits of the job.
Equipment is stolen even when cables and locks are used, but a lot of thefts have also resulted from carelessness by employees who don?t want to always be locking and unlocking the vehicles and equipment.
Scott Kopplinger, owner of Ironwood Landscape & Design in Broomfield, Colorado, says, "We're a little bit smaller than most companies so we can really keep a handle on things. In the last three years, there has been more property damage, rather than theft. And I kind of view it the same way."
"With pure theft you can pretty much deal with it if you know," Kopplinger says. "We mark and inventory all of our equipment. We have a process where equipment is checked out and then checked back in. If the same tool goes out and comes back damaged, to me that's just as bad as taking that tool home." In addition to background checks and a handwriting analysis for prospective employees, Hermes utilizes surveillance cameras and motion detectors, mainly because of stealing by non-employees on jobsites. "We're looking into other security-type key systems," he says. Needless to say, those types of actions are helpful in protecting the property from anyone.
Hermes feels their screening can expose other integrity problems. "Pilferers generally have behavioral problems such as laziness; they have others do work for them, and they're tardy. We stay away from those kinds of people. The organization becomes somewhat self-policing," he adds, "those people's loss is a much greater loss for them as opposed to me -- they lose their integrity, their honor and self respect. I've only lost a pad of paper."
Using locks and surveillance cameras can provide lots of help and 24-hour monitoring. Employers can also enforce GPS tracking on vehicles, which can eliminate the occurrence of employees running personal errands on the company?s time and fuel.
John Gibson, director of operations for lawn and plant health care for Swingle Lawn, Tree and Landscape Care in Denver, Colorado, requires a check-out and inventory process for vehicles on a daily basis. He says, "Each individual driving a truck is responsible for having certain equipment. They have documentation to track everything."
A couple of perks that are offered, says Gibson, are services to all employees at 50% off, as well as equipment loaned out for personal use if the employees are trained on the tools. "We do have a stern policy on buzz work, or side jobs," Gibson adds. "If our workers are doing work on the side, that is stealing -- not something we allow." If employees get caught with company equipment performing moonlighting services in the Denver area, they are terminated. Also, workers cannot solicit the company's clients for their own personal needs. "We are not a marketing source for their business," he says. "Theft is a tough thing to handle in a landscape business, or any business. We can only track so many things and I would be naieve to say we don't get anything stolen, but we try to keep things to a minimum.?
"Our policy is very simple -- if we catch someone, we fire them," says Kevin McHale of McHale Landscape Design Inc. in Upper Marlboro, Maryland. "We don't have much employee theft at all. In the last ten years, we've fired two people." The reason being is that the company has surveillance and managers that are very involved in the paperwork and loading the trucks, so there's a lot of supervision. In addition, "employees are told during orientation that there are cameras, so they know what our policy is." He adds, "I think one of the keys is to have long-term employees. The more turnover you have the more theft there is."
But the theft that goes on in every company is the theft of time. Most executives don't realize how much non-productive time really costs. When you calculate the cost, you'll probably be blown away. For example, your crews go out for the day, and during their travel time they stop for coffee and doughnuts. Somehow, someway, the time flies by and before you know it, thirty to forty minutes have disappeared from the work schedule.
If you have four or five people on the crew, even at $10 an hour, you just lost $25. Try computing that every day, and you realize that it's costing you $125 per week in lost time, in just that one area alone. Multiply this by the number of crews you have, and then throw in some office staff time -- it doesn't take long to add up.
We talk about the shortage of labor, especially in the field, yet as business owners we're reluctant to use their time more efficiently and effectively. The difference you save can make an enormous difference on your bottom line.
The idea of questioning your employee is very unappealing, unless you are up to your eyeballs in discontent and want to let them go as soon as possible. So, when confronting your employee or trying to recover from inventory loss, John Case's book, "Employee Theft -- The Profit Killer," provides useful guidelines. The book offers insight as to why employees steal, how to identify risks, recover losses, interview suspects and establish anonymous tip programs, as well as dealing with theft caused by employee drug abuse.
A couple of websites to consider in helping identify employee theft are howtostopemployeetheft.com and theftstopper.com, which has a help line to solve any employee theft case. It also offers employment applications to help search for qualified job applicants.
There can be a number of factors as to why employee theft exists, but trying to reduce the number of dissatisfied workers, or finding a resolution to the problem, will create a better work ethic and environment, not to mention stabilize the inventory.
So, hopefully, the next time one of your employees needs an emergency tank of gas, he'll ask you right off the bat, or at least remember to reimburse you for it.