In a recent blog I wrote about clothing security and referenced the 2015 Global Retail Theft Barometer. In the report they discussed the causes for increased shrink in garment specialty stores. Part of the increase was attributed to a decrease in spending on retail anti-theft devices within this segment of the retail industry. Another factor the researchers found was employee theft being a major cause for shortage. This applied to all retailers, including clothing stores, the focus of my earlier article. According to the report, employee theft accounted for 45% of all shrink in North America amounting to $16.56 billion dollars. It was noted that, “The primary reasons for employee theft were weak pre-employment screening procedures, reduced associate supervision, increasing part-time work force (especially during peak winter season) and easy sale of stolen merchandise.” (GRTB page 52). In this article I want to focus on employee background checks. Do you complete pre-employment screening before you hire a new member to your staff? If you aren’t, what is it costing you in terms of shortage and theft by not learning more about the person you are allowing to join your team?
Without doing employee background checks you have no idea who the person is that you are suddenly empowering with access to cash registers, merchandise or more importantly, other employees and customers. A solid pre-employment screening will let you know if a prospective employee has a criminal history they are attempting to hide from you. You can also learn if the candidate has declared bankruptcy or what their payment history has been. A good background check company will also run a sex offender registry check on a person. Whatever your business is, you are serving others and, like it or not, their safety and security is your responsibility.
I worked closely with our Human Resources Manager during my years as a Loss Prevention Manager. I know our company did background checks, I saw applicants turned down after a background check came back with a discrepancy. I also know that during the fourth quarter we started our seasonal hiring process and the number of temporary employees we brought on board could not have had the same level of scrutiny as those hired during the remainder of the year. Often these were the employees we ended up apprehending for theft during the holiday season. In many instances, after I would catch someone stealing and interview them I would learn about financial situations that should have been caught in a more detailed pre-employment screening. Especially during the holiday season I remember a number of different employees I caught stealing and how often I would find out an employee had creditors they were trying to pay off. Bills looming over them along with the desire to provide gifts for the holidays often contributed to people justifying why they committed their crimes.
It was not uncommon for me to catch employees during the holidays stealing merchandise by passing items to a relative or friend. I caught my fair share of employees stealing over the years, but I remember the cases that were most troubling to me were those involving young mothers. I recall one employee I apprehended who was stealing children’s clothing and toys and passing them to a relative by not ringing them in the register.During my interview of the employee, she admitted she had been out of work for some time prior to getting the job with our store and was behind on bills. She was stealing in order to provide gifts for her baby for Christmas. I don’t know whether a more thorough employee background check would have caught something in this young woman’s history that might have prevented her being hired in the first place. I do know that she was hired in our fourth quarter hiring rush and went to jail. I will never know if we accounted for every loss she caused the store, certainly we accounted for most, but how much loss is “okay” for a business? That is a question you need to ask yourself.
I tell this story because it fits exactly into the research results of the Global Retail Theft Barometer. My case was probably more than 10 years ago, but employee theft continues to grow and businesses are hurt as a result. Don’t take a chance on hiring the wrong people. Let a background check company help you preserve your reputation and profits.
For more information on pre-employment screening, contact us or call 1.770.426.0547