By Lavern Clarke, Staff reporter
Graham
SMALL BUSINESSES calculate losses to pilferage and other in-house theft at between 5-20 per cent of revenues, a problem that the sector says seems to be growing as employees find more creative ways to steal.
According to president of the Small Business Association of Jamaica, Andrea Graham, workplace theft tends to occur in cyclical patterns, and the severity often depends on the type of business. The degree of difficulty in pinpointing the perpetrator tends to be highest where employee concentration is high within the business unit.
Losses are calculated on three levels: time taken without permission and otherwise illegally gained with 'doctored' sick leave certificates, stolen money, and goods.
"Fraud is prevalent," says Graham, adding that the more professionally trained the employee, and the more cash they handle, the greater the propensity for theft. The professionals, she said, are better able to hide their activities.
Efforts are made to screen employees through referrals but said Graham: "You can never really tell (about honesty). Once some employees see a loophole, once they see an opportunity, they grab it."
The situation has forced small operators to tighten controls and adopt 'best practices' in the management of their operations.
Outlining strategies employed to counter losses, Graham said companies have been adopting better accounting practices, employing tighter monetary controls by diligent check-off procedures, monitoring inventory levels, and using the 'caged and keyed' security system where small and expensive items are secured in cages under lock and key, while large items are displayed in shops and stores.
The SBAJ has about 200 members on roll, and generally represents companies with 1-10 employees. The SBAJ estimates that there are 40,000 small and micro businesses in operation, many of which operate outside the formal system to avoid taxes and regulation.
The average small business is presently worth just under $6m on average, said Graham, adding that pilfering not only affects profitability, but impacts employee welfare as more funds are now being spent on securing company assets.
"The more expensive life gets, the more inventive employees become", in how they steal. Speaking from personal experience the SBAJ president said goods are taken out in the garbage, prices are hiked at the counter and different prices entered on the customers receipts and the companies books, with the employee pocketing the difference.
Graham discounted suggestions that the issue could be one of too little pay, noting that even where employee compensation is attractive, theft still occurs.
"There is always a demand for money," she said. "There are some people who are on the borderline (needy but honest), but get pushed over the edge."
