Hardware Retailing

SEP 2016

Hardware Retailing magazine is the pre-eminent how-to management magazine for small business owners and managers in the home improvement retailing industry.

Issue link: http://www.hardwareretailingarchive.com/i/717393

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Page 26 of 106

HARDWARE RETAILING | September 2016 22 Trends The Cost of Hiring the Wrong Workers Hiring the right employees is an ongoing challenge for independent home improvement retailers, but failing to do so comes with a price tag. One of the top two reasons for inventory loss/shrinkage in retail is employee theft, according to research from the National Retail Federation. The No. 1 cause is shoplifting, but the No. 2 cause, employee theft, costs a business more. The average dollar amount lost per dishonest employee is approximately $1,234 versus $377 for shoplifting, the research shows. Yet the measures retailers take to prescreen potential new hires are frequently minimal. Despite the expense of employee theft, nearly 40 percent of retailers don't verify prospective employees' employment histories and even fewer check personal references, the National Retail Federation reports. Source: The 2016 National Retail Security Survey, National Retail Federation Top Sources of Inventory Shrinkage Retailers' Most-Used Integrity Screening Options Criminal Conviction Checks . . 89.2% Multiple interviews . . . . . . . . . 81.5% Verify Past Employment History . . . . . . . . 61.5% Personal Reference Checks . . 58.5% Drug Screening . . . . . . . . . . . . . 55.4% Applied to Retail: The costs of hiring quickly just to fill a position rather than finding the best person for your business can be high. Think through how you can improve your hiring process. If you and your managers hire without checking references or calling past employers, you may be exposing your business to unnecessary theft risks. The benefits of hiring carefully are plentiful—a retailer not only can get a better feel for job applicants' honesty, but can also reduce turnover by finding employees who will care more about the business and be a better fit for the company overall. ? 39.3% 16.8% 35.8% Shoplifting/ External Theft Employee Theft/ Internal Theft Administrative/ Paperwork Error

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