I read a very interesting article awhile back published in the Gainesville Sun about employee theft (Business leader speaks out about employee theft). The article mentions Freddie Wehbe, the owner of a Domino’s franchise in Florida, who spoke to a number of business owners about an employee theft issue he dealt with at one of his franchise locations. To his credit, Mr. Wehbe decided to discuss the issue in a very public way in order to create some awareness about this significant problem that the writer of the article stated was “taboo in most business circles”.
Within the article there are some interesting facts about employee theft. Two of them being;
1) According to the FBI, employee theft is the fastest growing crime in the US today and
2)The US Chamber of Commerce indicated that 1/3 of all small businesses fail as a result of employee theft.
I was somewhat surprised the writer of this article stated this issue appears to be a “taboo” subject in the business community. With 25 years of experience within the retail industry, I learned very early on that most losses reported by retailers are the result of employee theft. This is not a secret and is openly discussed in the retail industry. As the largest employer in the US economy with over $4 Trillion in annual sales, employee theft costs the retail industry over $40 Billion annually.
Mr. Wehbe discussed the advice he received on how to deal with this problem from industry experts and the law enforcement community. Correctly, they recommended conducting background checks on new employees, including drug testing and installing locks, cameras and other physical security deterrents. These recommendations will certainly make it physically harder for his employee to steal as well as help him make better hiring decisions. Unfortunately, it addresses only half the issue.
In order to significantly impact employee theft, an employer must also contend with those issues that affect employee behavior. Most importantly, they must explore what kind of work environment they are providing employees.
Time and again I have found a very strong correlation between low employee morale and high levels of employee theft. Employee morale is complex and can involve such issues as compensation, benefits, training and incentives to name only a few. However, it is not just about giving someone a raise as much as it is about providing a pat on the back for a job well done. We all take pride in completing worthwhile work, which may be challenging, but when employees are given the tools to perform their job well and recognized for it, they feel rewarded.
For me whether or not an employee has a healthy morale has always boiled down to the attitude an employer has towards their employees. I have always found it helpful to determine this attitude by asking a question;
“are my employees my greatest asset or my greatest liability"?
The answer to that question will determine what kind of environment exists for employees.
To Mr. Wehbe I would say: good job on the changes made so far, but please also focus on employee morale, for it will largely determine whether or not he’ll need to continue to contend with employee theft issues. To the writer of the Gainesville Sun article, I would recommend digging deeper into the issue of employee theft. You may discover a large community of professionals out there dedicated to reducing loss and that this topic is not at all “taboo” in the business community across the globe.
Tell us your thoughts on the role employee morale plays with regards to employee theft!
Steven May, President