Insurance Broker Tips to Reduce Your Rate of Employee Theft

According to insurance broker data, within the retail sector, more than 40 percent of shrinkage costs can be attributed to internal theft. According to the Australian Retailers Association Executive Director, Russell Zimmerman, internal theft is often more sophisticated, is more difficult to detect and has a greater financial impact compared to external theft. As an experienced insurance agent in Perth, we have compiled some advice to help you reduce your rate of employee theft.

Recruit and Retain a Reliable Staff

The most effective way to prevent or significantly limit internal theft is to recruit and retain a reliable staff. Failing to do reference checks or interview comprehensively is a sure way to recruit team members with a history of theft. This leaves the fault firmly in the hands of the employer. While this level of recruitment will require a bit of homework, the payoff is worth it.

At a minimum, be sure to conduct comprehensive reference and background checks. Look for signs of a criminal history that involves theft, fraud, violence, and civil court actions involving debt collection. Ensure you also check with previous employers to discover the reasons for the applicant leaving.

It is also important to treat your staff well. There is a strong link between theft and employee dissatisfaction. So, be sure to treat your employees with consideration and respect to reduce the inclination to steal as revenge, while increasing the possibility of the employee feeling guilty of taking advantage of an employer who has entrusted them.

Improve Your Business Processes

When you have poor business processes, your employees may exploit any opportunities to steal, as they are more likely to get away with it. Tightening up your processes will make it harder for internal theft to occur.

According to research, the most common types of internal theft are:

Asset Theft: This is stealing stock, transferring company funds to an employee personal account or skimming from a cash register.

Vendor Fraud: This involves creating fictitious invoices or inflating legitimate charges before transferring the payments to false reimbursements.

Payroll Fraud: Paying someone who doesn't actually work for the company and collecting the cash.

You can implement a number of processes to combat this type of theft including dividing your billing and payroll responsibilities among different employees, establishing anonymous reporting, monitoring business credit cards and performing regular audits.

Technological Solutions

If you suspect your business may be vulnerable to internal theft, there are a number of technological solutions that can help you catch the culprit. This includes video monitoring of sensitive locations such as staff common rooms, points of sale and disposal areas.

Additionally, point of sale and accounting software can provide valuable data and analytics to provide you with alerts and insights. There are increasingly sophisticated solutions that will flag suspicious transactions to retrieve associated information and video footage.

Sadly, there is always a risk of internal theft, but you don't need to carry this burden. Your insurance broker can advise you of how you can transfer this risk to a specialist insurance product.

If you are considering insurance brokers Perth, be sure to speak to us. The GSK Insurance team would be delighted to discuss your requirements to help you manage your risk profile.