Feature
THE ENEMY WITHIN
‘Inside jobs’ are on the increase and even the ‘model employee’ may not be
all that he or she seems. And if you catch a criminal employee in the act of
committing a crime, Ian Kirke, a director of TFS asks how can you safeguard
your position and make the correct disciplinary decisions?
N
OT all threats to a responsible for the odd petty theft, having their laptops stolen, usually
business announce the real damage could be done by just before their contracts were
themselves with a loud the seemingly settled workers about to end. Previously, the
bang or an order to a doing the same job for perhaps 10- company only asked for a simple
bank clerk to ‘Stick ‘em 15 years, perhaps responsible for a theft report but when it started to
up’. The enemy could be someone little-understood, intricate part of ask much more pertinent questions
you know and have worked with the business. They may seem to be about the exact circumstances of
for years. ‘married to the job’ – not taking the theft, the number of stolen
One-time energy giant Enron holidays, working late at night, that laptops suddenly fell away.
and Barings bank were devoured sort of thing. If you have robust procedures
from inside by dishonest Ian Kirke, They could be genuinely against employee theft, it can be
employees. Even at the smaller end director TFS conscientious but it is just possible very worthwhile bringing them to
of the scale, continuous thefts can that they’re up to no good. The new recruits’ attention as part of
also be very debilitating to a former proprietors of Barings bank the induction process. It can do no
company’s finances, especially in must wish that they’d paid more harm to point out on the
these challenging and uncertain attention to what Nick Leeson was application form that the company
economic times. doing in the Singapore back office does frequent background checks
In fact, many experts believe that and perhaps hired someone with on applicants. “Constant petty
employees can be a bigger threat derivatives trading expertise to tell theft can turn into even bigger
to a company than external forces, them what was really going on. things”, adds Ian, “as the person or
so it’s just as important to have a Accountants are often dismissed as people involved grow in
plan to deal with the issue. ‘boring’ – but not the one who confidence.” So by tolerating petty
According to the UK-based Centre worked for Enron. theft, you’re unwittingly sending
for Retail Research’s Global Retail Of course, not all employee out an invitation to come and rob
Theft Barometer, across North malpractice is on a large scale but your warehouse.”
America, Europe and Asia Pacific, small and frequent thefts soon add “There’s good evidence that once
disloyal employees are responsible up and can back a sizeable dent in people think they can get away
for 35.2% of shrinkage worth a company’s performance. Be with small thefts, they may
around £17,464 million - but this is honest, is there a culture of petty graduate to much more serious
only a small part of the story as the larceny at your company? Has it heists.
total cost in terms of lost trade, become acceptable for people to Technology is one of the
preventative measures and take stationery items, crates of effective solutions on offer.
investigation is around £49,808 alcohol or laptop computers home Electronic data systems are
million. And, it doesn’t stop there; with them? One major British excellent at collecting primary
internal losses are rarely reported supermarket came to us because it intelligence and directing
and account for a big chunk of was suffering shrinkage of around managers and investigators to
unrecorded crime. £54 million a year. home in on higher risk areas,
However, very few ‘insider We implemented a combination though it’s questionable whether
attacks’ come out of the blue and of solutions, including a they can pick up the subtle long-
there are often warning signs for management training programme term frauds. As with external
those who take the trouble to look covering 120 stores annually. threats, dealing with the human
for them. Having measured the results, the aspect is more important. What if
Senior management needs to client has subsequently identified you do find evidence that an
take a long hard look at their savings of around £2.2m annually employee is helping himself to the
workforce and ascertain where the by stamping out dishonest staff contents of your shelves, the
true threat lies. People often point activities. stationery cupboard or the
the finger at short-term or casual An electronics company had a company bank account? How do
workers and while they may be problem with temporary workers you interview the suspect?
20 • RETAIL FRAUD
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