The credit crunch and other fine biscuits: do retailers have the appetite to deal with employee driven stock loss? asks Ian Kirke, Managing Director of Training For Success.
The current global crisis squeezes us all however businesses arguably feel the rap more acutely. As the sale of primary products and services begin to falter it is probably time for a quick glance behind to have a sneak at what is haemorrhaging via shrinkage and, dare I say it, employee driven fraud and theft. The retail sector is a primary victim with everyday goods easily accessible by the light-fingered, and monetary streams that can be easily manipulated by the crafty.
To put this issue into perspective let’s start with a few mind-blowing Monopoly-style figures. Across North America, Europe and the Asia-Pacific, disloyal employees are responsible for 35.2 per cent of shrinkage or £17,464 million (according to Prof Joshua Bamfield’s 2007 Global Retail Theft Barometer). This figure is dwarfed by the sum that represents the cost to businesses in lost trade, preventative measures and investigation that totals around £49,808m (Bamfield again). Or to put it another way the total GDP of the United Arab Emirates (World Bank 2006). It is arguable that domestically internal dishonest stock loss is rarely reported and thus represents a significant chunk of unrecorded crime. Nationally this issue has an impact upon the economy albeit at a community level this practice may have dire consequences on the availability of local service delivery. But still the losses continue alarmingly with high value foods and home products as priority targets. So why is it that shrink caused by dishonest colleagues continues to be such a massive drain when retail has employed staff since the year dot?
This topic may be approached from a number of angles although primarily I suspect that there are two broad fields of exploration. Firstly, by mechanical means; secondly, by reference to the human element. Mechanical methods are on the up. Electronic data mining systems have hit the market at an alarming rate. They drill down so far that if someone inadvertently passes wind near a till, an alarm will ring. Don’t get me wrong, these devices are brilliant at collecting primary intelligence and directing managers and investigators to the higher probability area of detection; although do they have the capability to deal with subtle long-term frauds? Nevertheless once this data is acted upon there is the unpredictable element. The human being. The one piece of the jigsaw puzzle that does not necessarily adhere to the simple truths of computer binary coding.
Management training within this arena is at best ad-hoc and at worse simply modelled on what the manager or internal investigator saw on ‘Frost’, ‘The Bill’ or any other cop show. Investigations are often crude and one-dimensional, without notice of any possible defences or knowledge of how far legally one can burrow. Often HR have little option but to take the safe ground of either no action or, in the eyes of the investigator, a slap on the wrists. And so the cycle of deceit continues. Confidence and collusion grow and dishonesty becomes part of the culture. HR decisions are often based on the criminal grounds of ‘beyond reasonable doubt’ with a smattering of Human Rights thrown in. Pity that neither apply!
Investigative Interviewing is simple. If you like a gossip you are, I submit, 95 per cent of the way there! You just need a simple structure and an understanding of the key employment law drivers that underpin the process. After all, the dishonest colleague can only act in one of four ways – they can either lie, tell the truth, say nothing or go for a mixture of all three – and if you have a tactical response to all, then collusion, counter-allegations and whistle-blowing are a piece of cake! To discover the Holy Grail why not test drive the Training For Success interview programme? Coupled with existing software solutions this pragmatic approach has saved organisations millions and sent out a terrific message – steal from us and you will be discovered, dealt with and more likely than not dismissed, unless you cut a deal – but that can always be discussed on the course!
