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The three employees that cause 70% of your loss

Posted on 3/1/12 9:30 AM

Every company employs three associates who create seventy percent of their losses. It doesn’t matter if you lose a hundred dollars or a million dollars a year…seventy percent of it can be traced back to one of these three people. Who are these people?

Okay, they’re not real people in your store, but a “type” of person…a composite if you will. So let’s meet these folks:

Mr. I Don’t Know

Mr. I Don’t Care

Mr. Too bad you’re not here

(Please ignore the titles and the use of the pronoun “he” throughout this article. It bears no bias towards gender or that these “people” only relate to males)

Mr. I Don’t Know means well. He harbors no ill will toward the company and he has the best intentions. The problem is he just doesn’t know the correct way of doing things. He makes mistakes and errors, which cost you money. These mistakes are the little things, like not knowing how to “mark out of stock” or proper credit card verification process. Sometimes he returns incorrect change to customers because he doesn’t know how avoid mistakes while at the register. The list of things Mr. I Don’t Know will do improperly might be long, or it might be short (we don’t know what he doesn’t know), the real concern is if you have a lot of Mr. I Don’t Knows on your staff, you’re going to have a hard time reconciling all your losses.

How do you correct a Mr. I Don’t Know? He is pretty easy to fix. It is a simple matter of training (and re-training), educating and keeping him aware of how to do things. Once a Mr. I Don’t Know learns and starts to know, he’ll no longer exist.

Mr. I Don’t Care is a little bit of a problem. It’s not that he is dishonest or that he will steal from you. The problem is he just doesn’t care about policies or processes. For him, the end justifies the means because he isn’t looking at the big picture. He thinks, “What difference does it make if I check the shipment, I mean it is what it is, right?” His attitude and approach not only create loss but also opportunities for theft. Mr. I Don’t Care doesn’t recognize that “not caring” about great customer service results in more shoplifting. Mr. I Don’t Care may not steal from you, but he won’t care if anyone else does.

I Don’t Know resized 600How do you fix Mr. I Don’t Care? This is not as easy a fix as the well-intentioned “I Don’t Knows.” There will be resistance and in some cases a lot of lip service. What is required are clear “rules” and vigilant follow up to ensure the rules are followed. With regard to loss prevention, it is important to make him understand that he should care about preventing loss. He needs to be part of the team and if not, you need to make a decision. If you can’t get him to care you must look at his overall value as an employee of your company.

Mr. Too Bad You’re Not Here is the most dangerous of the group. He may or may not act like Mr. I Don’t Know. (Note: They seldom act like Mr. I Don’t Care) Equally, he may behave like one of your best employees. It’s all a charade of course because he is stealing from you. Mr. Too Bad is more than happy to work with either, Mr. I Don’t Know or Mr. I Don’t Care, because neither will call him out for stealing. (Mr. I Don’t Care simply thinks, “Hey it’s not my problem, I’m not stealing”)

How to identify Mr. Too Bad You’re Not Here. Recognizing Mr. Too Bad is not an easy task. It’s helpful if you train all associates on what to look for and provide them guidelines and a manner in which to report dishonest activity. It’s also a good idea to enforce policy so you know who isn’t following the rules. Surprise visits and audits are also excellent tools to discover their real behaviors. A firm policy of “trust but verify” is an excellent step towards identifying Mr. Too Bad You’re Not Here.

Based on the rate of turnover, for each of these employee types that we correct, there are probably another two coming through our door. It may sound like a daunting task, but a focus on these three issues will greatly reduce your shrink…by as much as 40% (we can’t get all the people all the time). So go ahead and calculate that return on investment – what would a 40% reduction in loss mean to your company?

Written by Raymond Esposito, Executive Vice President of Sales and Marketing

Topics: training and awareness

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