How can you reduce employee theft?

Theft by employees is a major issue for firms, with cost estimates at around $200 million each year. The most common form of employee theft is ‘sweethearting’. Sweethearting is when employees give products away for free to preferred customers and is typically done by people operating the cash register in stores. New research from Michigan State University suggests that better recruitment is the best way to prevent this form of employee theft. The research is one of the first studies to investigate sweethearting in isolation. The research team investigated over 800 service employees in hotels, restaurants, tanning salons and several other similar service industries. Alarmingly, 67% of participants said they had participated in sweethearting in the last two months. The primary motivation was to receive better tips from their favoured customers or a similar sweetheart deal when they in turn shopped at the customers premises. “I was surprised by how pervasive this behaviour was across a wide range of service industries,” the researchers say. “I fully expected to see this behaviour in bars and restaurants, but I was surprised at how prevalent it was in industries like retail, sports, and recreation, and even with insurance claims.” Preventing sweethearting The research team suggest that the best means of preventing such employee theft is by employing better screening during recruitment. “Our results show that by adding a few screening questions that focus on the potential employee’s risk-taking, ethics, and need for social acceptance, employers could identify ‘bad apples’ up front and simply avoid hiring them,” they say. “In the long run, this approach would address the issue.” In the short-term education is the key tactic. Employers need to educate staff on the ramifications of sweethearting, both for the employee and the employer. In many cases, something as simple as reminding employees that such behaviour is un-ethical can often go a long way towards curbing sweethearting. With the issue costing organizations hundreds of billions each year, sweethearting is something that can no longer be brushed under the carpet. Hopefully this research will make employers more aware of the size of the problem, and provide some help in tackling it. Adi Gaskell is head of online at the Process Excellence Network and is a writer on management issues for Professional Manager magazine.
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