What to Do if an Employee Is Stealing

No one likes to think that their employees might steal from them. However, statistics show that it’s more likely than not that at least one employee of a business has stolen from their employer. While some might stop at once, others are repeat offenders. Internal theft can cause losses that some businesses, especially small ones, might not be able to survive.

Also Read: HRCI Associate Professional in Human Resources (aPHR)

But what can a business owner or a manager do? Continued heft could ultimately lead to bankruptcy, but confronting an employee could result in workplace disruptions at best or a lawsuit at worst.

Look for the Signs

Fortunately, there are signs that business owners and managers can look for to determine whether or not their employees are stealing from them. Within the business, look for the following:

  • Missing office supplies
  • Disappearing inventory
  • Depleted petty cash
  • An inexplicable decrease in profits
  • Payroll discrepancies
  • Cars parked near exits
  • Unlocked exit doors
  • Unwarranted expenses (travel or otherwise)

Once you have determined that theft is occurring, there are some additional signals to watch for to determine who the culprit is. Look for the following employee behaviors:

  • Working unusual hours
  • Mismatching salary and lifestyle
  • Poor performance at work
  • Complaining about work
  • Defensiveness
  • An inexplicable closeness with or favoritism by a customer or a supplier

Don’t Jump to Conclusions

It’s important not to jump to conclusions. Even if an employee exhibits all of the above behaviors, it could be a coincidence. Falsely accusing an employee of theft could result in a defamation lawsuit. Unless you’ve caught the employee in question red-handed, it’s important to thoroughly investigate before taking any other actions.

Thoroughly Investigate

Before deciding what to do, conduct a thorough investigation. Determine exactly what was taken and how much. What cost did this have for your company? You’ll need to gather all possible evidence in order to have a case against the perpetrator. Whether you decide only to fire the employee in question or to bring charges against them for theft, you’ll have to be able to prove beyond a reasonable doubt that it was that employee.

Otherwise, you could be facing a lawsuit for defamation or wrongful termination.

Consult an Expert

Especially if the theft is substantial, you may want to consult an outside expert. There are professional investigators who could help gather evidence. An outside expert can not only bring their own specialized knowledge to the investigation but will also be a neutral party. This can help ensure that a manager’s opinion of their staff members isn’t influencing the investigation in any way.

It’s also important to consult with a lawyer. A lawyer can tell you what the company’s rights and obligations are.

Determine the Punishment

The punishment should fit the crime. For minor thefts, a written warning or probation might be a sufficient punishment. However, for larger crimes, your hands might be tied. You may be required to fire the employee or even contact law enforcement.

Prevent Future Theft

Preventing theft in the first place is the best course of action. There are several steps you can take to avoid theft occurring at your company, including:

  • Contacting all references before hiring
  • Conducting criminal background checks
  • Restrict access to accounts
  • Separate accounting duties so no one person has access to everything
  • Do inventory regularly
  • Audit regularly
  • Allow employees to report suspicions anonymously

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