Need to Prevent Employee Theft? Start with the Interview Process

Theft is a pestering burden shouldered by all companies, especially retailers. It has the potential to cut into profit margin and even market share. And unfortunately, theft is not limited to shoplifters.

According to the 2017 National Retail Security Survey, employee theft accounted for 30.0 percent of inventory shrink, 36.5 percent of which was attributed to shoplifting.

If the statistics are correct, understanding how to prevent employee theft at your company has the potential to significantly reduce the impact suffered by your bottom line. This process includes diving into the mindset of why employees steal in the first place and implementing a preventative interview strategy that identifies high-risk candidates during the interview process.

Why is Employee Theft So Common in Retailers?

Employee theft is common for retailers because of the ease of access to cash and merchandise. Additionally, because many retailers employ entry-level or hourly wage employees, there is inherently more risk. Why is that?

1. For many employees, this is the most money they’ve ever had access to.

Think of a high school or college student who is working through school or looking to gain job experience. The sight of large sums of cash in a drawer could be overwhelming to an individual who is not prepared to handle the responsibility.

2. Some employees believe they are entitled to cash or merchandise to “even the scale” of any perceived inequitable treatment.

The justification for theft includes the following typical thoughts:

• I am paid a low hourly wage for my work, so I am entitled to additional cash or merchandise.

• My company won’t even notice because of the amount of merchandise on the store floor.

• My company is marking up the cost of goods to make a profit, so a tiny theft will not affect the store financially.

• I believe the store is not run well or the store will close soon, so I will take advantage of an opportunity.

For example, in June 2017, four JCPenney employees were accused of stealing $5,500 worth of merchandise after a loss prevention employee discovered their activity on security footage. The theft came one month before this particular store location was scheduled to close down, creating justification to take advantage of an opportunity.

Major retailers such as JCPenney have departments dedicated to loss prevention to monitor theft. However, creating an entire department to handle theft prevention is not always a reality for small-to-medium sized retailers.

One way to prevent employee theft is to use a tool that measures the emotional intelligence of individuals during the hiring and selection process. Measuring each individual’s core competencies will provide you with insight as to whether an individual poses a risk of stealing from your company.

Prevent Employee Theft With an Intelligent Interview Strategy

What is included in the typical retail job interview process? A review of the candidate’s resume, a face-to-face interview using typical job interview questions, and a basic assessment that measures personality.

That is just not enough to measure a candidate’s clarity of thinking and biases.

Your interview strategy should include:

• A review of the candidate’s resume

• Discussions with references to understand the candidate’s work and personal history

• A pre-employment assessment that measures thinking (not personality)

• A behavioral interview that identifies specific situations, tasks, actions, and results that help predict future behavior

An assessment that objectively measures a candidate’s value structure and emotional intelligence competencies will provide you with insight on red flags related to theft.

Use the assessment to screen for the following thinking patterns that can foster the potential for theft :

• Too quick to act without thinking things through

• The potential for an addictive personality

• Unaware of their surroundings or personal safety

• Strong inattention to following rules, policies, and procedures

• Lacks self-direction and is inattentive to personal goals

• Risk-taker who requires attention from others

Then, a behavioral interview will allow you to probe for information about these alarming thinking patterns in a structured interview.

Once you complete the interview process, you will be able to make an informed hiring decision about each candidate, reducing the risk of hiring a candidate who will steal from your company.

How ZERORISK HR Can Help Your Company Prevent Employee Theft

ZERORISK HR offers tools that help retail companies address employee theft in the pre-hiring process.

- The ZERORISK Hiring System includes an assessment that objectively measures each candidate’s emotional intelligence, a customizable behavioral interview guide for each candidate, and talent management software to compare each candidate’s thinking patterns.

- The Behavioral Interview Training training course is designed for small-to-medium size companies that need to train their interviewers on how to conduct a behavioral interview. Participants will learn the S.T.A.R. method, the best questions to ask in a behavioral interview, and primary and secondary probing techniques.