11/26/2007
Employee Theft Costing Small Businesses Billions
by Cozetta Jones, Graduate Assistant, UALR Lead Center
The latest National Retail Security Survey reports that theft cost U.S. retailers $41.6 billion last year including $19.5 billion or 48 percent from employee thefts. Fraud in the work place continues to be a pressing problem for small businesses and is one of the primary reasons why they fail.
Small Business Success, a publication by smallbuinessedge.com, offers steps that can prevent your business from falling victim to employee theft. First small business owners must promote ethical and honest behavior. This ethical and honest behavior should be communicated frequently informally and formally.
Small business owners can protect their assets by having stronger internal controls. The article suggests that one of the most important controls is separation of duties in the financial and operational process. The separation of duties is designed to ensure checks, balances, and accountability.
Get to know your employees. Small business owners should get to know their employees and potential employees. Businesses must be alert to changes in lifestyle, pay attention to changes in employees' attitudes such as unexplained defensiveness, paranoia, or anxiety. Companies should also carefully screen potential employees, background checks for new employees are an excellent way to cut down on hiring dishonest employees.
Finally, small business owners should investigate complaints and suspicious activities. Small business owners should require employees to take days off and annual vacations. The "dedicated" employee that hasn't taken a day off in years may be the employee that is riping off the company.
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