Employee theft isn’t very common, but it’s good to have some sort of plan to prevent it or deal with it once it’s happened. The best defense is of course having good, trustworthy employees. However, larger companies have a harder time getting to know all of their employees. If you do happen to have any issues with employee theft, or think that it could end up being a problem, here are some general guidelines to handle it.
1. Having a Positive Work Environment
A positive work environment is essential to making sure that all your employees follow established procedures and policies. Acting in the best interest of the organization should come naturally to employees, and that is best accomplished when they feel satisfied with their workplace. Fair employment practices, clear communication between the employees and management, having an understanding human resource approach, and positive work recognition are some of the effective ways to promote satisfaction among employees, and that can reduce employee theft.
2. Enforce Internal Controls
Internal controls are measures that are necessary to increase the efficiency and effectiveness of your company’s organization. Some of the essential internal controls are separation of duties, access controls and authorization controls. No employee should be responsible for both processing and recording a financial transaction. Financial and physical assets, information, and accounting information should be accessed only by authorized personnel. Moreover, there have to be strict policies in place to make sure how financial transactions are initiated, processed, recorded and reviewed.
3. Hire with Caution to Prevent Employee Theft
This is a given for any company, be it small or big. Hiring honest employees is the key to preventing employee theft. Pre-employment background checks are one of the best ways to make sure that you’re not hiring dishonest people. Some of the ways to carry out background checks are criminal history, civil history, driving license history, verification of educational qualifications and details of previous employment. If you don’t have the resources to carry out these checks, then hire a contractor. Implementing a strict pre-employment background check is essential to hiring good employees.
4. Implement “Employee Awareness” Programs
Inform your employees about how and where theft occurs on job sites. Creating education and awareness programs are the best ways to communicate your company’s ethics to your employees. Your employees should know your organization’s policies related to theft and fraud, and the disciplining procedures that will be undertaken for violating those policies.
5. Create an Anonymous Reporting System
Every company should have a way for employees, customers and vendors to report frauds and thefts anonymously. Many honest employees shy away from reporting theft because of the repercussions involved.
6. Carry Out Regular (and Random) Audits
Regular audits are essential to check whether your existing internal controls and policies are effective. Check finances, inventory, tools, equipment and other valuables during the audit. Personal checks are not recommended. A better way to back up audies is through random checks, without any prior announcements. This will reveal vulnerabilities to employee theft that didn’t show up previously. Audits also make sure that your employees know theft and fraud are serious issues in your company.
7. Use Prepaid Debit Cards Instead of Petty Cash
Handling hard cash is confusing and highly inefficient. Prepaid cards are a much better prospect. They help in carrying out the transactions and eliminating petty cas. And, transactions are recorded immediately. As soon as your employee uses the prepaid card, all the transactions details are logged into the bank account associated with the respective prepaid card.
The above tips are just a few suggestions to reduce construction employee theft. Every business is unique. That’s why Bento’s debit cards are designed for maximum flexibility.