While shrinkage is often viewed as primarily a concern for retail operations, the issue can actually affect almost any business. After all, even businesses which do not hold any stock (for example in the service sector) can suffer due to theft of valuable equipment by staff.
In fact, according to the PwC Global Economics Survey, the proportion of UK-based businesses and organisations which reported incidences of theft by employees increased from 44% to 55% between 2014 and 2016. An effective strategy to both prevent shrinkage and take decisive action to address it in the unfortunate event that this becomes necessary is, therefore, essential.
Equipping your premises with suitable security technology will certainly help you to achieve this, but it is not the only tool at your disposal. At Contact Fire & Security, we advise all our clients to implement intelligent management practices both in conjunction with and apart from the security systems we install. Although there is no single solution which will work for all businesses, here are a few basic principles which we've found to be effective in most circumstances.
Build good employer/employee relationships
A relationship of mutual trust and respect begins at the point of recruitment. So, if you are responsible for hiring staff, take care to check and scrutinise references from previous employers as carefully and thoroughly as possible. Trust your instincts and remember that having a natural rapport with your employees is just as important as relevant qualifications and experience. If you employ a HR team, ensure that they have the necessary training, skill set, and familiarity with existing staff members to enable them to apply these principles. Once your workforce is in place, take steps to foster a positive working environment, for example by financing regular social events or implementing an incentivised team-building framework.
Apply sensible working practices and enable discreet reporting
Good managerial practice is an essential part of any effective shrinkage prevention strategy. Examples of the steps you can take include supervising agency staff more closely, requiring employees to work in pairs or groups, and devising a well-defined timetable for every employee's working day. To support this, make sure that team members are given opportunities to inform you of any suspicious activity which might be worrying them. Remember, however, that this will inevitably be vulnerable to misuse, so trust in your own judgement is paramount.
Implement a solid inventory management system
The most effective inventory management systems begin the moment goods are ordered from the supplier, so make sure whoever is responsible for stock is aware of how many units are expected and has a proper procedure in place to record all deliveries in detail as soon as they arrive at your premises. Once goods are on site, use scanning technology and regular checks to maintain accurate records of stock levels. This will both deter potential thieves and ensure that any theft which takes place is swiftly identified. Online retailers are especially vulnerable to loss of stock through employee theft after the point of despatch, so take extra care to ensure your delivery provider's tracking system is fully integrated into your shrinkage prevention strategy if your business falls within this category.
Integrate security technology
While each element of your security system has its own specific functions to perform, in order to achieve optimum protection from shrinkage it is essential to integrate them effectively so that they also operate in support of one another. For example, if a door is fitted with an alarm there should also be a CCTV camera positioned to record the identity of anyone in the vicinity when it is activated.
Monitor and restrict access to stock and other valuables
Using access control systems to monitor staff movements throughout the building, into sensitive areas and to “clock-in/clock-out” can severally reduce internal theft in an organisation. This is mainly due to the deterrent of the employee knowing that they are being monitored. Having an access control system can allow you to print a report of who’s in the building in seconds. More advanced features such as fingerprint or iris recognition might seem like the stuff of science fiction but are becoming increasingly commonplace in the protection of highly valuable goods, equipment or information, as are other high-tech features such as face recognition and Avigilon's Unusual Motion Detection (UMD) technology.
At the other end of the scale, don't forget that it is possible to protect stock or property simply by keeping track of all relevant door keys and ensuring that they are kept in a safe place and accounted for at all times. We would recommend a key tracking system such as the Assa Abloy Traka System to supplement or replace an access control system.
From a security technology perspective, we highly recommend Avigilon's CCTV systems due to the unique features and remarkable degree of operational flexibility and precision they offer.
However, if a complete replacement of your CCTV system is not viable, there are still steps you can take to ensure your business benefits from maximum protection from theft by employees. We offer simple upgrades to intelligent systems whilst keeping your existing cameras and cable infrastructure.
Finally, if you are not in a position to make a significant investment in additional security technology, why not conduct a thorough assessment to discover if it is possible to improve protection from shrinkage by using your existing system more effectively? Your equipment may have unused features which could be integrated into your security system with just a few simple changes to the way in which it is configured and might also be compatible with complementary technology which can be obtained and installed at a lower financial cost than you expect.