Employees are the strength of an organization as they can drive growth and achieve targets. But they may also become the weakest link because even a single incident of theft or fraud can ruin your finances and reputation. Dishonest employees may harm your business in several ways, from stealing goods to intercepting checks, misappropriating funds, committing fraud, and abusing company credit cards. They may even steal customer data, intellectual property, and trade secrets. Business owners often fail to consider these threats and end up landing in a problem. Fortunately, implementing a few measures is enough to keep fraudulent activities at bay. Let us share some actionable tips to keep your small business safe from unscrupulous employees.
Double up on background checks
Keeping unscrupulous people out is the best defense strategy for a small business. You can get a good start by ramping up your hiring processes. Ensure a stringent vetting system with background and reference checks for every new hire. Steer clear of anyone with a shady reputation or malicious past. Building a team of honest and credible people keeps you stress-free because they are less likely to go on the wrong track later. Besides implementing background checks, recruiters should watch out for anomalies in candidate resumes and visual clues during interviews.
Implement zero-tolerance policies against dishonesty
While onboarding only honest employees is a good start, it does not guarantee safety down the line. A worker may turn hostile due to several reasons, from greed to financial desperation, external influence, and loss of loyalty. Taking a set-and-forget approach is not a choice for business owners. Implementing zero-tolerance policies against dishonest behavior dissuades employees from such acts. Set high ethical expectations and include your company policies and procedures in your employee handbook. Also, clearly mention the penalty for not following the rules.
Establish a defense strategy
A breach by an employee is always possible, despite the best measures to prevent such incidents. You can imagine the implications of data theft, forgery, and fraud for your business. In fact, you may end up facing a lawsuit regardless of your innocence because business owners are liable for employee fraud. The best attorneys for criminal defense matters recommend establishing a defense strategy beforehand to avoid last-minute stress. Knowing what to do and whom to connect with at such critical times can save you from trouble and prevent delays in validating your innocence.
Protect vulnerable assets
Another valuable tip for small business owners looking to safeguard themselves from dishonest employees is to protect their vulnerable assets. For example, organizations dealing in cash and high-value assets should implement surveillance solutions and access control to the areas holding these assets. Likewise, you must safeguard your server rooms and computers to address the risk of data theft. Limit check-signing authority only to top-level executives you trust. Also, segregate roles across financial functions to reduce the risk of theft along the chain.
You cannot undermine the significance of education and awareness when it comes to dealing with unscrupulous employees. Knowledge is power, as it takes organizations a long way in safeguarding themselves against risks. Everything boils down to understanding the types of fraud that may target your company. Cash theft, payroll fraud, false invoicing, and online scams are the most common threats you may encounter. Besides knowing the potential risks, research the dire consequences of these situations. Fraudulent activity can cause immense financial losses, affect customer trust, and tarnish the reputation of your company. You must also educate yourself on dealing with these situations so that you can get into action and launch a defensive plan sooner than later.
Get insurance coverage
While you may take all the recommended precautions against employee fraud, no measure is foolproof. But having insurance puts you in a safe place if something goes wrong. Look for a policy that specifically offers coverage against fraud. You can go the extra mile with identity theft insurance because of the growing threat of cyber attacks on corporate data. You can rely on it to cover the losses and penalties and get your business up and running sooner than later.
Addressing employee theft and fraud is vital for small businesses because a single incident can ruin your business. Overlooking the risk is the last thing you should do because it is more daunting than ever. Fortunately, you need not spend a fortune to deal with these risks because money is often a big deal for small companies. You can implement these measures to protect your business without breaking the bank.