The VHMA Files: When you suspect employee theft

In the workplace, our most trusting relationships are those that are built over time. We reward those who have earned our trust by giving them more responsibility and greater autonomy. We are confident that these employees will turn in an exemplary performance. What could go wrong? According to experienced managers, plenty.

The U.S. Department of Commerce estimates that one in three business failures is due to employee theft. And it's on the rise-even in veterinary practices. In addition to their many responsibilities, practice managers must also keep an eye open for office irregularities that suggest employee theft. 

Did you know?

> Four out of five cheats are first-time offenders, but less than 7 percent of new employees commit a fraud in the first year of employment. 

> The higher the position in the company, the more the individual usually steals as a result of their knowledge of, and at times ability to, override internal controls. Tenured employees also have developed a higher level of managerial trust.

1. Recognize an inside job. At first a few products are missing or perhaps there are inconsistencies in a spreadsheet, which you chalk up to clumsiness or an oversight. But soon it's clear that something is off and it's time to address your suspicions. 

While these behaviors aren't necessarily incriminating, they may signal a problem:

> Employees who consistently do not take vacations (violations are often discovered while the perpetrator is on vacation).

> Employees who are overly protective of their workspace.

> Employees who prefer unsupervised work, either working after hours or taking work home.

> Employees who show unexpected changes in behavior.

These behaviors coupled with unexplained debt and lost financial statements may indicate trouble.

2. Implement a plan. If you suspect theft, first tell the practice owner and work together to identify a plan. It's essential to have evidence before making accusations. 

An investigation is necessary to collect the information to support your suspicions. The investigation should be discreet, and information should be limited to those who need to know. Documentation is key. Be careful not to prejudge, and be sure to consider all potential suspects. An impartial third party can help evaluate information to eliminate potential biases.

3. Be proactive. Managers can minimize the potential for theft by thoroughly evaluating new hires. Perform background and credit checks at the time of hiring and at random times during an employee's tenure with a practice.

Addressing employee theft can be distressing, infuriating and uncomfortable. The situation can be volatile, so it's important to remain calm and have the facts before confronting the employee.