According to the 2011 Global Retail Theft Barometer, North America ranked employee theft as the highest category of annual retail loss (44.1%). The U.S. and Canada also saw the average employee theft ($1,750.33) reported as almost five times higher than the average stolen by shoplifters ($372.19). With these results showing a continued concern against dishonest employees, what are the good performers doing to make their shrink results great?
The GRTB shows the following areas of focus for preventing losses:
Employee Training to spot and deter theft
Increased Spending on crime prevention hardware and software
Pre-hiring Screening for employees
Let’s take a look at these three areas…
Store employees are the first line of defense when it comes to preventing theft. Against shoplifting and external loss, they must be trained on proper customer service, aware of and follow policies and procedures as well as know how to handle customer related issues. From an internal theft standpoint, they must be prepared to assist your company in preventing or detecting employee theft while also understanding the consequences if they choose to be dishonest.
An interesting statistic from the GRTB is that 94% of North American retailers stated that they use employee training to deter theft and that 85% plan on conducting additional training over the next year. Additional training of employees almost doubles other planned activities over the next twelve months.
What elements of training should be implemented?
This is a great question and we have a couple of different resources that you can check out with regards to employee loss prevention training.
Increased Crime Prevention Hardware and Software
There is no doubt that technology will continue to play a major role in our efforts to reducing loss. It seems for every mousetrap created, the mice continue to find ways of beating the trap. Technology has come a long way over the past decade and solution providers continue to develop new means of detecting, analyzing and preventing loss.
Almost 50% of respondents from the GRTB from North America plan to increase spend on hardware and software to prevent crime. This number may seem low; however, technology is already widely used at least in the United States, and may not represent how much technology will be utilized to prevent loss.
What will you be using for technology to prevent loss over the next twelve months?
With employee theft on the increase, a good loss prevention program begins with hiring the best possible employee. Yes it is true that the life of any employee can change and could result in a person choosing dishonesty, however it is also true that companies with a pre-employment screening program have better shrink percentages than those who do not screen.
In North America, 37% of retailers involved in the GRTB state that they plan to implement a screening program for new employees, which represents the 3rd most sought after program element amongst the survey respondents.
Do you have a pre-hire screening program?
Some believe that the cost of screening may be too high and therefore may not provide the appropriate ROI. Don’t count out pre-hire screening just yet, there are options.
As employee theft continues to increase each year and our economy in the United States remains sluggish, retailers will need to find the resources that enable them to do more for less. As you begin to plan your 2012 program think about LP Innovations. A phone call or meeting to discuss how we may be able to help costs your budget nothing.