Recent studies have shown that more than 60% of small businesses have dealt with employee theft so chances are most electricians have already been impacted by employee theft. Here’s some info on why it happens and some simple things you can do to stop it.
Why some employees steal
Mostly, it’s not because they need to, it’s because they can and they feel like you “owe” them i.e. the business is making heaps and i’m owed this for all the effort I’ve put in. And don’t think employee theft is only done by the lowest paid apprentice as it can happen anywhere where opportunity and a sense of entitlement exist.
It’s actually your fault
To put it bluntly employee theft is your fault as the business owner. Essentially, you’ve done one of two things. You either recruited a bad apple or you created an environment where the employee was presented with both opportunity and motive.
Recruiting a bad apple is something most people will do at some point in time and is much harder to avoid. It’s much easier to focus on implementing strategies to remove opportunity and motive.
Before we tell you how to stop theft from happening let’s first look at the types of theft.
Types of Theft
In your Electrical business the most common forms of theft are likely to be;
- Taking home supplies – you suddenly find materials delivered to the workshop or site start shrinking or the stuff in the van is never as much as you swear you had.
- Discounting to a friend or colluding with others – I’ll only put 80% of the job on the books and you can throw me 10% in cash and you bank the 10% saving
- Fictitious supplier accounts – find yourself paying small amounts to a supplier you’ve never heard of for stuff you don’t remember ordering?
- Taking cash commissions or cash jobs – telling you a customer cancelled a job after they paid them in cash.
- Using materials, equipment or offices for personal use – running a gig wiring home automation systems in the weekend using all the companies CAT6.
Giveaways it’s happening
Actually proving theft is going to be incredibly difficult without proper systems and tools in place but some giveaways include;
- Stock shrinkage – can also apply to tools.
- Reduced gross margin figures – generally speaking your GM should stay pretty consistent so sudden declines could be an indicator.
- Invoices or Bills as copies – never a good look.
- Inhouse rumours – where there is smoke there is often fire.
How can you stop it
Condone it, Support it
Everyone does it so legalize it! Tell the boys that rather than steal the switches, they can use the company account to buy them so they get the discount and you can just deduct it from their salary. The same applies to using the tools, the trailer or the wagon on the side. Let them know it’s ok if they want to do this as long as everything is back on site, clean and tidy by Monday morning and that they cover any losses or damage and that you’ll expect them to contribute next time the tools get serviced, or tag and tested.
Treat workers well
Most theft happens out of a sense of entitlement or perceived lack of fairness or respect. In this case, theft is often seen as easier than bailing up the boss to sort out any issues. In this case the most effective way of preventing theft is to treat your team how you would like to be treated. Here are some basic pointers that most builders will already know;
Show your appreciation
A person who feels appreciated will also naturally feel more of an affinity and respect for the one doing the appreciating. Letting them know how integral they are to the success of your business.
Show you respect them
According to recent research by Harvard Business Review, over half (54%) of employees feel they don’t regularly get respect from their employers. If you don’t respect your employees, I can guarantee they aren’t going to respect you.
A side issue here is if you don’t respect them, why did you hire them or why are they still working for you? But that’s another blog for another day!
Show you care
When your employees tell you about their child being sick, express concern, and remember to check in later to see how things are going. A little care can go a long way to earning the trust and respect of your staff.
You expect your employees to communicate with you in an efficient manner, but do you pay them the same courtesy? Do you actually listen when they come to you with ideas or do they see you screen calls from people on the team?
Run a tight ship
Staff quickly pick up on attitudes. If they perceive that you simply doesn’t care about monitoring stock or watching expenses, some will take advantage of the situation.
Get ‘hands on’ or back on the tools for some of the time or employ a competent and honest manager to control the day-to-day running of the business. The more closely you monitor your business, the less likely you are to be fleeced. A job tracking system such as Tradify will help you run the business and track time and materials so you can keep a close eye on the things.
Other ways to stop theft
- Rotate business duties to avoid employees gaining a monopoly over functions that are theft prone.
- Be vigilant about checking the references of new employees. Few people who steal actually have a criminal record, so ask previous employers how honest the person was.
- Put appropriate computer and information technology safeguards in place.
- Spell out clearly the business’s policy on theft and fraud in employment agreements and in the business’s operations manuals. Leave no one in any doubt as to what the rules are and what is expected of them.
So what do you do if you suspect someone is stealing?
First off, just don’t up and fire the person as this will most definitely blow back in your face. Employment law can be unforgiving when it comes to people making snap judgements. Take time to gather the proper evidence before doing anything. For an electrical business a combination of good record keeping and video surveillance will be required.
Walking a trusted third party through your suspicions and your proof is a good way of testing whether or not you’re ready to confront someone directly. If you do plan to have a conversation with one of your employees, make sure you give them ample warning and let them know they can bring a support person.
Make sure you bring your own support person (basically another trusted member of the team or maybe even your bookkeeper) and make sure someone takes notes or you record the conversation on your phone. If things get nasty, this recording could be crucial.
Employee theft happens a lot but by putting the above steps in place you should be able to stop or at least contain it. If you’ve come up with any great theft reduction or removal strategies we’d love you to leave a comment below.
- See more at: https://tradifyhq.com/electricians-are-you-are-being-fleeced-by-your-staff/