KATHMANDU: Employee thefts cost small businesses a huge chunk of the potential profit every year. As hard as it is for the employer to believe that someone hired to fill a trusted position in the company would actually take from the business, it happens every day in all kinds of businesses and in a variety of ways. It is estimated that up to 75 per cent of all employee theft goes unnoticed.
Employee theft is any kind of misconduct at the job — misuse of any assets or clause without proper
authority or permission to do so. It can take many forms from stealing office supplies or merchandise, stealing time by improperly reporting sick leave and vacation to stealing intellectual property and confidential information. When employee theft is discovered, the employer feels deceived and taken advantage of, but remembering that this is a business problem and addressing it as such will result in quick resolution and prevention.
Some security experts predict that up to 30 per cent of workers will steal at some point of time in their career. Difficult economic times, lack of salary increments and the threat of downsizing and cutbacks make it even more tempting for employees to help themselves exploit workplace benefits. Theft usually occurs as a result of a breakdown in procedure. Lack of system for checks and balances, employees not following clearly defined procedures and lack of supervisory attention all encourage thefts. Usually such activities take place because employees feel underpaid, or that they can write it off as everyone else does so, or want to ‘share’ a bit of the big chunk of profit that company makes. It can even be their way of getting even with the company in some cases. Also, the major reason of the theft is because most times, it goes unnoticed.
Jayesh Rimal, training manager of Radisson, says, “We sometimes deal with such problems. Roughly, 10 to 15 per cent of the employees end up being troublemakers with record of major and minor misconduct occurring now and then. But it is hard to take severe action, as the labour law is quite strong. Therefore, we first consult with legal experts before taking any concrete decision against such employees.”
Stating that it is all about attitude, he reveals that people however change over time. “The same employees whom we hired for their positive attitude and dedication can suddenly become negative and complacent after few months of work. It might be the work environment or personal issues prompting them to do so,” he adds. To tackle this issue, they have been paying extra attention to attitude, behaviour and background of an employee while hiring, while earlier they were more focused on academic achievements.
It is not just the story of one business house. The Manager of Aquasmart, Jyoti Neupane, shares a similar story. According to him, dissatisfaction over payment and dire needs are sometimes reasons for misconduct at the workplace. “We find employee thefts occurring a lot of times, but are unable to take any severe action because there is no set provision for handling such situations. It frustrates us, but until the problem gets totally out of hand, all we do is ask for an explanation and counsel them,” he informs.
Employee theft is a critical and most overlooked problem. However, it is not incurable. Small steps are important in dealing with such
issues. “The constant check and being updated about what is going on around by administrators saves a lot of bucks from going into unyielding pitfalls,” opines Neupane. “Regular checks and addressing every single allegations of fraud, or looking for warning signs of fraud will give management the facts needed to make informed decisions and reduce losses,” he adds.
Literature on the issue also underscores the importance for senior management and business owners to set the correct example. A cavalier attitude towards rules and regulations by the management will soon be reflected in the attitude of the employees. Every
employee, regardless of position, should be held accountable for their actions.
Some preventive methods
• Creating a positive work environment not just busts stress but also keeps a disciplinary
• Recognition between management and employees, and positive employee recognition can help reduce the likelihood of internal fraud and theft.
• Division of labour is not just helpful in efficient running of an office but also for distributing work pressure evenly thereby
• Access to physical and financial assets and information as well as accounting systems should be restricted to authorised employees.
• Hiring with proper information comes handy. Running a check on previous records, work recommendations, civil history for lawsuits, education verification and criminal history matter all the more.
• It is equally essential to verify employees’ reasons for taking leaves.
• It is important to inform employees about the company’s policies and procedures related to fraud, internal controls in place to prevent fraud, the organisation’s code of conduct and ethics policies, and how violations of these policies will be disciplined. Every employee should sign a form to verify receipt of this material. Employees should receive annual training
on these topics and sign an acknowledgement each time.
• Implementing an anonymous reporting system is also helpful in keeping employees on their toes.