Employee theft

Quite often, people using my apps come to me and ask me what tools they have to prevent their employees from potentially stealing their client lists, or divulging company secrets to the competitors of that business.

There are two approaches that I typically recommend to people. The first approach is the legal approach. Specifically, it is to use a non compete agreement. A non compete agreement typically prevents people from competing with your company or working for competitors of your company for two years. Of course, the terms of the non compete contract can be negotiated. The negotiation of the non compete agreement clauses typically happens during the hiring process of the employee because that is essentially the only time that this employee has negotiation leverage since you want to hire them.

Working With Trustworthy People

The other way to prevent your employees from stealing your clients, or going to work for a competitor and taking your business secrets there is a much more simple one. It is simply to work with people who have a good reputation and who are honest. That kind of an approach will take you a long way in making sure that your employees don’t turn on you. So work with honest and trustworthy people, and you will not need to invoke your non compete agreement.


Video On How To Prevent Employees From Stealing Clients

Here is a video on how to prevent your employees from stealing your clients or working for a competitor. The video explains the non compete agreement.



And remember, even if you do have a non compete agreement, to enforce it you actually have to litigate. And that is expensive. So you really want to take preventative measures to ensure that your employees do not begin stealing your clients.

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How To Prevent Employee Theft Of IP (Intellectual Property) And Data

When your employees steal your customers, they can also eventually start their own businesses that is financially supported with the revenue brought in from the stolen clients. In those cases, your employees who already stole your clients, might also steal company data and other company secrets. An NDA (non disclosure agreement) might be an additional good tool to use in order to protect your intellectual property in such cases.

If you are interested in learning more about protecting your intellectual property like business ideas, please take a look at our full article on protecting business ideas. And if you are just in the business idea stage of your business, check out this article on how to get business ideas, and other good things to do int the business idea stage.

Preventing Employee Theft Of Money

Preventing employees from stealing money should in theory be relatively easy. All you have to do is have one employee at a time be responsible for manning a cash register. Before an employee beging manning a cash register, the cash register funds should be counted by the previous employee, and the same process should be repeated when an employee stops manning a cash register. And you can verify the receipts to confirm that the appropriate amount of money is in the cash register when that employee is done with their shift.

Preventing Employee Theft Using Common Sense

No matter whether your employees are stealing office supplies, money, company secrets, data, or your actual clients, you can prevent this theft with common sense. The common sense is that if you make things more difficult for people with more hurdles to jump through, since it will be more difficult, it will immediately decrease the amount of stealing.

So how you make it more difficult? I'll give you a few examples. If your employees are stealing office supplies, then what you do is store the office supplies in a more visible place where there are many people around. That act alone will make many of your employees who steal casually think twice about stealing because it will be easier for them to get caught, and you will immediately reduce theft. You can also emphasize punishment during your company speeches or when employees get hired or in HR policies. That extra attention will also let people know that you mean business, and will immediately deter some people from stealing.

So think about how you can scare people by emphasizing how great the punishment for stealing is, and how little they truly gain by stealing. That aspect of common sense might help them understand that what they are doing is wrong and doesn't even bring them much benefit. Plus, if you really want to reduce employee stealing, casually mention that you take it very serious and pursue criminal legal action that might have them end up in jail. That will certainly get people to think twice about stealing.

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Set Up Cameras In The Office

If you set up visible cameras in the office, it will prevent employee stealing. Such cameras are usually meant to prevent real thieves from stealing, but if you have visible cameras around the office hanging from the ceiling, it can also send a message to other employees that you are watching them.

Make It Easy To Report Employee Theft

If you have an anonymous line people can call or a box where people can drop notes, it will make it easier to employees to police one another to help prevent stealing of any kind at your company. Plus it will add a visual deterrent to any potential thief.

Adding A Human Touch With Relationships

If you get to know your employees, and build relationships with them to the point where they will begin to like and respect you, they will be less likely to steal from you because people naturally don't want to harm someone they like and respect. On the other hand, if you make people feel like they are just cogs in a bigger system, they will have less qualms about stealing from that bigger system.

Further Business Resources

For more on evolving and perfecting business ideas, take a look at the work of Eric Ries and Steve Blank, and the learn startup movement.

In addition to those resources, I've written 20 business books that you can check out. If you are in the process of starting or growing your company, these books can certainly help you. My my most popular book is my business plan book. And if you feel the need personal, one on one coaching, I also offer business coaching where you can sit down, and have a conversation about your business over Skype.


Article by Alex Genadinik