Businesses in the US lose over $60 billion dollars a year to shrinkage. The biggest cause of loss? Employee theft. Not only can physical theft result in huge losses, but stolen data can result in further damage.

What can business owners do to prevent shrinkage due to employee theft?

Fostering Honesty

Entrepreneurs who want to reduce shrinkage might want to investigate methods of fostering honesty in the workplace. This starts with hiring procedures: businesses should conduct a background check on every person they intend to hire. This can be costly, but will result in less shrinkage in the future. At least three references should also be contacted for more insight into the character of any individual.

Business owners should establish a strong management environment. If it is clear to employees that managers are attentive and knowledgeable, they will be less likely to think that theft is feasible. Cash flow and sensitive information storage should be managed closely. Managers can prevent theft by regularly monitoring and checking for any discrepancies.

Employees can even help in these efforts. Some businesses set up an anonymous tip system, so that concerned employees can report shady behavior without fear of retaliation. With proper management, workplace theft can be disincentivized.

The most commonly stolen items by employees are cash and office supplies. In fact, the average loss in a single case of employee theft is six times higher than an average case of shoplifting. Areas where employees interact with money should be under surveillance. Business owners have invested into technology that can prevent theft. Security cameras and metal detectors can dissuade employees from attempting to steal from the workplace.

Protecting Sensitive Information

Not only does employee theft lead to a loss of money or property, but it can also lead to data breaches. The theft of information is potentially the most damaging form of workplace theft. Some examples of sensitive information that might be stolen are trade secrets, customer data, product designs, and login credentials.

Every business should be vigilant in protecting employee and customer information. There are a number of precautions to take when securing documents and sensitive data. It is prudent to limit access to paperwork to only those who need it. For an added layer of security, document archives should be located off-site. Digital security is also a must, since malware and viruses can cause inadvertent leaks. Firmly establish rules regarding what can or cannot be accessed on external devices, and use anti-virus software.

Employees or customers can be targeted with stolen sensitive data. Identity theft is one of the worst scenarios that can happen as a result of a data breach. Fraudsters looking to make some easy cash might open new credit cards or bank accounts in someone else's name. This can result in the loss of thousands of dollars and hours of strenuous work for those affected. Businesses can also be sued for negligence when they fail to adequately secure sensitive information. The IRS offers tips for individuals and businesses looking to protect themselves from identity theft.

Rates of employee theft are increasing. Savvy entrepreneurs can avoid being a part of this statistic by wisely protecting their assets and data. For more advice on bolstering workplace security, check out this article on cyber security vulnerabilities.