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Employees are Great. Unless They Steal from You.

October 21, 2018

Posted in Employment Law

Employees make your business possible because in order to grow you couldn’t possibly do all that needs to be done yourself. You need to find capable people who are motivated to help you and your customers. Another important quality is honesty.

That’s a lesson Robert Herjavec learned when he started a business. He owns a cybersecurity firm and is one of the investors you may have seen on Shark Tank. On a YouTube videohe recounts how oblivious he was to the siphoning off of customers to another company thanks to one of his key employees.

He said his head of marketing, Jennifer, suddenly quit. She started crying in the exit interview and Herjavec didn’t understand why. She told him he was a great boss and she needed to let him know the person running his sales department was directing half the customers to a competing company the employee owned.

“I look at her and I’m like, no, I’m too smart to have that happen to me. Jennifer, I don’t know what you’re talking about. All of a sudden I start thinking, what if it’s true?” Herjavec said.

He said he pulled out sales records and went over deals his company lost. He called up one of the prospects and asked why they didn’t hire his company. “The guy says, I don’t know what you’re talking about. We actually did buy from you.”

Not only did the sales manager own a competing company, it had a similar name to confuse customers and, on Herjavec’s time, he took orders for his own company, cashing checks made out to it as quickly as he could.

Herjavec warns, “The minute you hire the first employee you got to be careful. I’ve had people do horrible things to me in business. People who work for me, competitors, everybody. You’ve got to look out for yourself.”

You can’t monitor your employees 24/7 to make sure they’re not taking advantage of you. But Entrepreneur magazinehas some suggestions on what you can do.

  • Run background checks and drug tests on all potential hires. Those with drug addictions are more likely to steal to support their habit. You may find past criminal charges for theft or fraud. You can also check to see if the person’s been a defendant in a civil lawsuit, like one filed by a former employer accusing the person of stealing from it or for fraud.
  • Create a confidential way for employees to warn you of their co-workers’ suspicious behavior. Offer rewards to employees who provide information to prevent or uncover theft. It could be an email address or a locked-box for tips written on paper. A potentially dishonest employee may think twice if the workforce is on your side.
  • It’s easier to steal from someone you don’t know well and harder (but not impossible) to steal from someone with whom you have a relationship. Connect with your employees so they see you as another hard working person, not someone far removed living the high life who won’t miss whatever is stolen. You may also learn someone is going through financial issues or experiencing high levels of stress, which can increase the impulse to steal. You may be able to direct them to local services to get help or give them extra hours to earn more money.

You can’t live with some employees and your business can’t live without them. If you think you may be victimized by an employee or want take steps to prevent that from happening, contact my officeso we can talk about the issue, what you can do and how I can help.