What’s the greatest threat to your cannabis business? If you said employees, you’re correct.
Employees are the primary cause of 90 percent of all significant theft losses. More than 75 percent of employees admit to having stolen from an employer at least once.
While it might make you look at your employees a bit differently, it should also create a sense of awareness about where you spend your security dollars. Sometimes being open and upfront with your security procedures can have the biggest impact on thwarting criminal behavior.
Where are your biggest threats?
Employee threats can happen both intentionally and unintentionally. They usually occur in one of four ways.
Cash – money is always a big motivator. Any time an employee has access to cash, they have an opportunity to pocket the money. This can be avoided by moving to a card-only system. Be aware they can also steal by falsifying transactions. A sound auditing system will keep employees on their toes.
Inventory – stealing physical products for personal use or for selling on the open marketplace.
Data – if an employee takes information for personal gain, you could be losing business. They can take banking numbers, client information, or even company secrets.
Payroll – payroll theft occurs when an employee cashes a check that doesn’t belong to them, or gets paid for work they didn’t perform.
How do you reduce your threats?
Even with employee theft being one of your business’s greatest risks, it doesn’t mean you should be skeptical of hiring. Instead, set up a system that helps prevent theft before it even begins.
Know your employees
This is easier to do with small businesses, but it’s important for all companies to set up a management system that creates a strong company culture. This process starts even before a person is hired. Have a good interview process in place. Check references. Ask questions to determine how well they fit in. This process will morph and change over time as you build confidence in your hiring process.
Create procedures for handling cash
Whether you take physical cash or not, you should have a procedure for checking daily transactions. Pay attention to voided transactions or anything that doesn’t feel quite right. While giving each employee a dedicated drawer can add to your security, it might not make sense for a small business. Periodic checks and balances can work to keep employees on their toes.
Know your inventory
This goes beyond what’s on the floor. What do you have in stock rooms? Who has access? A good video surveillance system will keep an eye on every aspect of your business, including your retail and warehouse locations. Create policies about employee backpacks and purses, and if necessary, have a bag check at the end of employee shifts.
Have a system for reporting theft
Co-workers often fear retaliation if they report a co-worker. In a small work environment, suspicious behavior can make your good employees walk away. Talking about theft and security is your first line of defense. Consider anonymous reporting mechanisms to give your employees options.
Not only is it a requirement in a cannabis business, but it’s also a leading way to eliminate internal theft. When employees know their actions are being recorded, they are less likely to partake in criminal activity. Be aware that do-it-yourself surveillance strategies might not offer optimal protection. This is one area where relying on a security team to help with installation can pay for itself.
For IT Strategy, Security and Compliance, or Help Desk Services, reach out to us at Cannabis Technology Partners 360-450-4759.