Caught in the Act
In cartoons, you can immediately spot the bad guy-his slick, black hair and droopy mustache give him away. In real life, though, it's not as easy to tell who might be a criminal.
Rather than waste your time suspecting everyone of evil intent, it's easier, cheaper and healthier to take some simple steps to prevent crime from happening in the first place. There are ways to make your business less vulnerable, notes Mike Coffey, CPCU, assistant vice president of Citizens Insurance in Howell, Michigan. Employee theft accounts for 50 to 70 percent of all workplace crime, Coffey says. Staffers comprise as much as 40 percent of that number, while support staff-including cleaning staff, contractors and others-round out the rest.
"If you have one or more employees, you're vulnerable," agrees Read Hayes, senior consultant at Loss Prevention Specialists in Winter Park, Florida. Knowing that, smart entrepreneurs focus their primary efforts on preventing internal crime:
- Get a good small-business insurance policy covering outside crime, employee theft and/or computer fraud.
- Create a culture of honesty by establishing a written code of ethics and conduct. Train your employees in how to spot a problem and what to do about it. "If your corporate culture is one where people work hard and enjoy being a team, that's subtle social control," Hayes says. "If someone is doing something wrong, others will exert pressure on him to stop or will tell someone in authority. If, on the other hand, your culture is one of 'Get what you can get while you can get it,' there are going to be problems." Make sure managers lead by example and maintain a high level of integrity.
- Institute an excellent employee screening program that will weed out potentially troublesome candidates.
- Do criminal background checks and drug testing on potential hires.
- Administer a standardized paper-and-pencil test (the kind available from career counseling centers) that will indicate the respondent's level of integrity.
- Require keys and access cards to certain areas and limit the number of employees who have them.
- Lock up laptops, cell phones and other valuables at the end of the day.
And what about outside theft?
- Minimize the money in the cash registers, and put excess cash in a safe.
- Vary the time you make bank deposits, and alternate your route to the bank.
- Brighten up the place. Burglars like darkness; good interior and exterior lighting deters them. If it's within your budget, install burglar alarms or a closed-circuit TV.
- Place electronic tags on merchandise.
- Never schedule an employee to work alone.
- Let the local police department know your business hours, and ask them to put your company on its beat.
Checking It Twice
If you don't have the money to hire a loss-prevention consultant, use this checklist to make your own assessment.
- Demographics: Where is the business located? How close is the business to "hot spots" with a great deal of transient traffic, such as an interstate ramp, a bus stop or a bar?
- Building size: How large is the building, and how many entrances are there to the street and to parking lots?
- Employees: What is the average length of tenure? What are their overall attitudes toward work? How safe is their behavior?
- Operating characteristics: How much money is at the location at one time? What percentage of sales are refunds, returns and bad checks (a tip-off to insider crime)?
Source: Read Hayes, Loss Prevention Specialists