Small business owners are being urged to minimise the risk of staff theft after a new survey found 43% of small business employees admit they or their colleagues provide discounts or freebies to friends and family.
Commissioned by ADT security, the survey of 500 small business employees and 400 small business owners revealed the younger the employee, the more likely they are to engage in “sweet-hearting”.
According to the survey, 49% of Generation Y and 45% of Generation X admit they are guilty of it, compared to 30% of baby boomers.
The survey shows 42% of women and 44% of men admit to sweet-hearting, with 46% of full-time employees admitting to it compared to 36% of part-timers.
Fortunately, only 18% of employees believe it is easier to steal or engage in fraud in a smaller business due to the close proximity in which you work with colleagues.
However, small business owners are known for lacking sophisticated security technology, leaving them more vulnerable to employee theft.
For example, a retail business operating off one cash register is a very inexpensive system but will require more effort on the business owner’s part to manage.
Mark Norton, managing director of ADT Security says the survey results show small businesses have some natural advantages over employee theft, particularly when the owners know each employee and/or oversee every contract or payment.
“However, the financial losses due to employee theft and fraud can be devastating… 43% of small business owners estimate their losses from crime total up to $10,000 annually,” Norton says.
Ways in which business owners can minimise the risk of employee theft include performing regular spot audits of stock and finances, rotating staff in different roles, and showing they value their employees.
“We would also recommend they implement a comprehensive security plan which identifies security threats and trouble-shoots potential weaknesses, as well as installing physical security measures such as intruder alarms and monitored video surveillance,” Norton says.
In the case of a retail business, security cameras directed at registers can provide possible detection of an employee engaging in sweet-hearting.
Norton says employers should also watch out for the following:
•Strange behaviour such as an employee who only wants to use one particular cash register.
•More cash in the business when a particular employee leaves or goes on holiday.
•A significant number of cancelled or deleted register sales.
•An employee who won’t allow duties to be divided up or resists changes to their role.
•An employee whose lifestyle appears out of line with their income, is under financial stress or is struggling with addiction issues.
This article first appeared on StartupSmart, Australia’s top site for start-up business people.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
