Protecting Your Business By Preventing Employee Theft
It’s an unfortunate fact that employee theft is one of the leading causes of profit loss for many businesses across a wide range of industries, including oil and lube shops. The reality is you’re far more likely to be victimized by one of your own employees than by someone you don’t know. In fact, an employee is on average 15 times more likely than a non-employee to steal from a business, according to the National Federation of Independent Business. Across the country employees account for a staggering 44 percent of theft losses from stores — a percentage that is likely far higher for oil and lube operations. Employee theft can be so damaging to a business’s bottom line that the U.S. Department of Commerce states that almost one-third of business failures can be linked to employee theft or fraud. These grave statistics underline how important it is to protect your business from unscrupulous workers.
The First Step to Solving a Problem
Depending on the size of your business and the amount of trouble you’ve had with theft in the past, you may or may not recognize your need to protect yourself. Whether or not you’ve been victimized previously, there are plenty of reasons to implement a comprehensive theft prevention strategy that will not only defend against a few bad apples, but will also help keep honest employees honest.
Issues Unique to Oil and Lube Shops
While employee theft can be a problem for virtually any kind of business from the bakery down the street to Fortune 500 companies, each has its own particular vulnerabilities to theft — lube shops are no exception. Theft can take a variety of forms, but there are several that tend to be most common in the oil and lube sector.
When most people think of employee theft, they think of someone swiping cash out of the register. While that happens, it is probably the least common and most easily diagnosed type of employee theft. A single inexpensive security camera overlooking the register should be more than adequate to keep honest employees honest and catch any grafters red handed. Likewise, there are safeguards built into virtually every point-of-sale system at use in oil and lube shops to prevent theft at the register. The real struggle for oil and lube shops is keeping track of inventory and tools and making sure neither walks out the door.
Of course, one of the best ways to reduce your business’ exposure to employee theft is to hire good workers to begin with. When looking for new help it’s always a good idea to perform background checks and get several references for any applicant before offering them a job. While a clean background check and good references are by no means a guarantee of an honest worker, making the effort can certainly weed out some bad hires before they cost the business any money.
Loss and Prevention
Inventory loss can take a number of forms from simple theft to freebies for an employee’s friends or family. The best defense against the former is to make sure store managers have and maintain a running tally of all inventory coming in and going out. For instance, a manager should be able to reconcile the number of oil filters he has at the end of the day with the number he had at the beginning minus the ones that were sold. Any consistent discrepancies are a telltale sign there could be a problem. Another way to reduce the likelihood of workers carting off valuable supplies is to keep the pricier items, like full-synthetic oil, in frequently trafficked and highly visible areas.
Managers have a responsibility to keep a close eye on the workers under them and to be aware of any suspicious behavior. If employees know owners and managers are on top of things, it’s less likely they’ll be tempted to steal.
It’s also possible some workers may cause inventory loss without intentionally or consciously doing something wrong. This frequently occurs when an employee’s friends or family members come through the store and items like windshield wipers or air filters get installed on their cars without making it onto the ticket. Some workers may even offer these little giveaways to regular customers who they’ve built a relationship with thinking they’re helping the business. While they may seem harmless to the worker, these freebies can add up.
Preventing this kind of well-meaning damage to the bottom line starts with bosses and managers being upfront with the lube techs about their expectations in this area. Some owners may even be OK with putting a free set of wipers on a regular customer’s car every now and then, but there should be clear and well-defined boundaries explained from the top down.
One way or another, every piece of inventory that goes out the door should be accounted for.
Another employee theft problem unique to automotive maintenance shops is the loss of expensive tools. Since they’re not part of the shop’s inventory and there are plenty of ways for tools to disappear without being stolen, tool theft is perhaps the most difficult kind of employee theft to diagnose and stop. Compounding this problem is the fact that workers may “steal” tools by accident simply by leaving them in their pockets. Since tools are essential for technicians to get their jobs done quickly, missing tools not only cost money, but they cost time, also.
While there’s no perfect solution for tackling tool loss, managers should be wary if tools seem to disappear at an unusually high rate. Some oil and lube operations have even instituted systems where technicians have to check out their tool belts at the beginning and end of their shifts.
Addressing the Problem
If theft is or has been a recurring problem in your business, there are a few things to be aware of. First, it’s important to remember your other employees may be your best line of defense. Make sure there is an easy and anonymous way for workers to report thefts by their fellow employees. Be as tactful as possible. You don’t want to cause an air of distrust in the workplace, but there should always be an open line of communication between employer and employee.
If you suspect a certain individual of stealing from the business, be very careful about making accusations. Before saying anything, conduct a thorough investigation to make sure your accusations have merit. Remember, you run the risk of a lawsuit if you make a false accusation.
Protecting the Bottom Line
On average, employee theft is perpetrated by workers who have been on the job for at least several years. Once their fingers get sticky, it usually takes about three years for the bad apple to be discovered. Since three years is a long time to suffer expensive losses, it’s in every owner and manager’s best interest to make sure it doesn’t happen on their watch.