Everyone is back to work now; you’ve got loyal employees that have been with you for years and in many cases new people. But are they trustworthy? According to the latest data from the U.S. Chamber of Commerce three out of four employees will steal from you this year! I don’t know, I don’t think I can buy those figures, maybe because I believe most people are basically honest but there’s that 5% – well – you really need to watch.
What do they steal?
Office workers steal everything from paper clips, pens, paper and stamps. In the field tape measures, hand tools, wrenches disappear along with grass seed, fertilizer and more. A few years ago I heard reports of an employee stealing 5 gals of gas – every day. Hey – it costs money to drive to and from work!
When I owned my company two workers deliberately left a whip and blower in high grass on their last job on a Friday evening. After work he was going to go back and get the equipment. What happened? Individuals in the parking lot witnessed their activity so they stole the hidden equipment before they got back. We found out about all this from storeowners in the shopping center.
As part of my consulting I ride with many account managers and job supers. One day while riding checking jobs with a landscape construction manager, I noticed the topsoil the crews were using had quite a bit of stone in it. When I got back to their office I asked the sales person what type of soil he specified for the job, he said screened, “hum”. I then consulted with the owner and we found out our manager was collecting a “fee” from the supplier for the inferior topsoil. Now the owner wondered, what else? He began to closely monitor this manager to discover he was having material delivered to his own jobs that were being done on Saturdays, and to add insult to injury he was doing “his jobs” with the company equipment and personnel! Hey I can’t make this stuff up.
Lastly be careful of your books. I know I know you trust your book keeper but I have two friends, one from Texas the other from Georgia that had hundreds of thousands of dollars embezzled from them. Oh yes both of these went to prison but did they recover any of the money? Not a penny.
The point is whether it’s paper clips, tools or major theft, this stuff happens everyday and we need to do all we can to stop it.
The Biggest Item That’s Stolen
The largest culprit is TIME, yes the theft of TIME. People come in late and cause crews to waste time, crews stop for coffee and donuts in the morning, crews get gas in the morning at busy stations, this is all costing you thousands. Oh and the new problem, cell phones. If 20 of your field people check their email and messages 4 times a day for just a few minutes each time and they do that every day it can cost you some $30,000.00!
Where is the chain saw?
Most of the times the answer to this question is, “I don’t know haven’t seen it.” Sound familiar? Sometimes your people borrow equipment and mean to bring it back but…..in other cases the equipment get’s deliberately stolen.
To help prevent this conduct there must be a clear policy in place along with progressive discipline when it happens. In the case of outright theft most owners feel termination should be the consequence but with less serious infractions it’s best to have clear policy in place as to what will/should happen.
What Can Be Done
I’m not suggesting that all of the items are implemented that I’ve listed below, but you may want to think about some of them if they may serve as a deterrent.
- Limit the amount of employees with access to your inventory and tools and keep these areas locked.
- Install 24-hour surveillance cameras to monitor inside and outside of your yard and shop.
- Install GPS tracking devices on your vehicles.
- Create rules and policies as to the use of cell phones and enforce them.
- Create bonus programs that reward managers for not losing tools and equipment. Give them the carrot instead of the stick.
- Create a family culture because family members generally don’t steal from family members.
- Talk to your CPA about what safe guards need to be put in place to avoid embezzlement.
- Talk to your computer consultant about creating safeguards to make it as difficult as possible to copy confidential data from your computers.
- Have pre-employment drug testing to prevent the type of people that might steal from coming into your company in the first place.
- Talk about it, yes talk about the problem with your managers. Make them aware that you know it could be or is a problem. By making them aware that you are aware will go a long way in reducing the problem.
As owners we certainly want to trust our people, especially our long time and loyal people. But we do have to face the reality of “the new normal, and work to have less temptation in the workplace. Business is difficult enough without having our profits stolen from us. Let’s be proactive in these areas but at the same time, work to create a positive culture in our companies so that this will be less of a problem.
I’m interested to know, have you had bad experiences? What have you done to prevent theft in your company?
Ed Laflamme LIC
From 1987 to 1992 a trusted employee was stealing inventory, tools, gas and doing work on the side for customers (while I was going through a divorce and partnership break-up). Total theft amounted to $50,000 plus. I let him go but did not prosecute. He had an enfant and a two year old daughter. I went to Sunday school and High School with him and brought him into my industry (Irrigation). In spite of catching him red-handed I turned the other cheek out of concern for his wife and children. Turns out he went into the same business in the same area. But it came back to him in spades-I also let go my foreman the year before whom he subsequently hired (and who ripped him off blind). He is currently in the final stages of pancreatic cancer…as the saying goes “payback is a bitch”.
John – agreed – what goes around comes around.