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Contractor Employee Theft

How to Prevent Against Employee Theft

The average estimated cost of a stolen piece of equipment is around $46,000. For contractors, tool theft is not only a costly direct loss, but it can also prevent you from completing projects and compensating for every day expenses.

What’s more, anywhere between 30 percent to 85 percent of theft originates from authorized personnel on your job site. Potential thieves may be working for you right now.

Let’s get familiar with why employee theft occurs and how to prevent the problem before it starts.

Why Does Employee Theft Occur?
According to Nancy Moorhouse, VP and Director of Safety, Teichert Construction, “The common rationalization from some employees is ‘The contractor leaves all these tools, generators and equipment unprotected, because they are so rich. Obviously they don’t care. Besides, I need a drill at home.’” In many cases, theft occurs because the opportunity presents itself, not because there is a need.

However, there are other reasons theft occurs, including:

  • Low workplace morale.
  • The employee feels mistreated or wronged by the company.
  • The employee feels undercompensated and appreciated.

Understanding the possible causes of theft will allow you to take steps to safeguard your business from loss now and in the future.

Related Read: What You Should Know About On-Site Tool Theft and Loss So You Can Guard Against It

How You Can Prevent Employee Theft

Communication and Culture

The first step to preventing theft is understanding why your employees may be motivated to steal and addressing the situation up-front through communication and culture. This means:

  • Engaging in open, honest communication with your employees. Communicate the reasons behind business decisions with your employees, particularly if these decisions affect them.
  • Providing opportunities for employees to talk about their concerns and ask questions, privately and publicly. Communication is a two-way street. Giving employees opportunities to voice their opinions boosts morale and makes individual employees feel appreciated.
  • Identifying and clearly defining consequences of employee theft. Some thefts occur because the consequences are not high enough to outweigh the benefits. Ensure that your expectations are clearly defined and understood.
  • Creating employee awareness programs to keep your employees informed about how theft occurs. This program can also include a reward system, as well as an anonymous tip process.

Policies and Processes

While open communication and an anti-theft culture are important, there are certain processes and policies that should also be a part of your business’ day-to-day to protect against and monitor for theft.

Download the free checklist of policies and processes to help ensure your business is as protected from employee theft as possible.

Related Checklist: Control Tool And Equipment Theft From A Van Or Pickup Truck

A Guide to Protecting Against Employee Theft

  • Complete comprehensive background checks during the hiring process. Look for previous offenses, both serious and minor.
  • Implement a secure inventory management system. Incorporate regular inventory checks at the beginning and ends of each day to ensure all equipment has made its way back to your main office.
  • Establish an end-of-day routine that deters theft, including blocking in valuable equipment, checking the perimeter for entry points and ensuring alarms are turned on.
  • Mark your equipment with your company name or logo where it is easily visible to the naked eye.
  • Lock equipment when not in use so employees or a third party cannot move it from the site.
  • Limit the number of individuals in charge of keys or access to job sites.
  • Make supervisors, managers, foremen and employees responsible for tool loss.
  • Install video surveillance on job sites when possible.
  • Protect digital assets, too. Keep record of which logins and passwords each of your employees has access to, and set up controls on what can be accessed

Checklist Sources

“Reducing Construction Site Theft by Employees and Subcontractors.” AllBusiness, https://www.allbusiness.com/reducing-construction-site-theft-by-employees-and-subcontractors-11739699-1.html.
“Five Steps for Preventing Construction Site Theft.” ConstructConnect, 23 November 2016, http://www.constructconnect.com/blog/operating-insights/five-steps-for-preventing-construction-site-theft/.