An annual survey conducted by Pinkertons indicates that Employee Theft has replaced Workplace Violence as the "most pressing workforce concern." (See "Worst Corporate Heartburn: Employee Theft" HR Wire: 1-3).  Thankfully, this is one burden you can share with your PEO.  When employers exercise caution in the hiring process, potential thieves can be weeded out before they are ever hired.  Two options are pre-employment background checks and personal integrity tests.

A pre-employment background check is vital in the workplace today, since employers are commonly held liable for crimes committed by their employees unless they are able to prove that the employee was carefully screened as an applicant.  According to Investigative Services Corporation (ISC), "courts have held employers responsible for a wide range of conduct, including fraud and forgery, theft, assault and wrongful death." 

Personal integrity tests are another option.  Employees are asked as part of the application process whether they are willing to take a personal integrity test, and the test simply measures an employee's ethical standards.  Most of these tests have questions built in which weed out employees who give false answers.  Our human resources department can recommend other safety measures or sources you can look to for help.

You want to be able to trust your employees, and most employees value being trusted.  Your efforts to eliminate employees with a tendency toward theft before they are hired, and your willingness to eliminate "temptations" and address problems in a timely manner will go a long way toward keeping your profit from walking out the door at 5:00.

To prevent employee theft: recommends some of the following steps for preventing theft: 

1. Perform an Annual Independent Audit
2. Require backup documentation of all expenses (receipts)
3. Keep office supplies in a locked cupboard, and require a signature when supplies are removed
4. Spot check deliveries to insure that goods received and invoice descriptions match
5. Bond All Employees who have access to money
6. Require employees with access to cash/receivables to take vacation time (this helps to expose cover-ups)
7. Always require a counter-signature
8. Take the time to go over accounts payable and look at where your money is going
9. Address problems when you first suspect them
10. Do not allow company books to leave the facility
11. Require passwords and update them frequently        

- Bruce H. Henderson, Tanner & Guin, L.L.C.

Sources:

Fraser, Jill Andresky.  "Methods of Identifying Employee Theft."  INC Magazine.
Henderson, Bruce H.  "Putting the Cuffs on Employee Theft." Tanner & Guinn, P.C.  www.tannerguin.com.