Think about your store and how shrink affects you every day. We all know it’s a cost of doing business, but there comes a point where you have to stem those losses. It’s not acceptable for any business to allow shrink to go unchecked. That’s why there are so many tools available for retailers to prevent shoplifting. There is one tool that is often overlooked to aid in the reduction of shrink. That’s the background check. I bet you never thought such a simple tool could help you reduce your losses and make a positive impact on your bottom line.
I work for a well established corporation and we won’t hire someone with a negative background. This isn’t to discriminate a certain class of person, but aimed at minimizing our overall risk. That wasn’t always the case in my career and I can remember working for much smaller companies where this wasn’t quite a priority. I can assure you the losses, as a percentage to sales, were much higher in this smaller company than what I see in my current role, in a large, multi-billion dollar a year company. Why is that?
There’s an insurmountable number of reasons why, but I firmly believe that hiring the right person has everything to do with a reduction in overall shrink. For starters, if you are screening out potentially bad candidates with a criminal background check, you will more than likely reduce your store’s turnover. This is a key metric in successful businesses. How well does your company or store keep people? Turnover, especially in retail, can mean higher losses contributed to internal theft. If you have an individual that is job hopping, or has a less than stellar past, that person is more likely to steal from you. This holds true because that employee is not invested in your company.
A few years back, I was part of a team that was developing a program to address high shrink stores. Basically, we wanted to see what stores were experiencing the greatest amount of loss. From there, we eventually would implement different strategies to see if we could have a positive impact on the losses. There was a ton of research that went into this, and it became far more complex than I could have imagined. Of course, we looked at inventory adjustments, POS overrides and the usual contributors of loss; however we went a step further and looked at turnover in those stores compared to the others not on the list. No surprise, the stores with the highest shrink, also had the highest rates of turnover in the company. This wasn’t a coincidence. There also wasn’t an immediate fix we could put into place. We were already using a background check, so we looked at other ways to reduce turnover, such as improving store morale and better training for the store management teams.
If shrink in your store is a problem, try combating it from its root cause. There’s no simpler way to reduce your risk of employee theft than using a background check. Hire smart and don’t expose yourself to unnecessary loss.
For more information, contact us: Background Checks, or call 1.770.426.0547