Employee Misconduct

THE SMALLER THE BUSINESS, THE LARGER THE VICTIM

GROCERS, MANUFACTURES AND DISTRIBUTORS ARE NOT IMMUNE FROM BECOMING VICTIMS.

April 1, 2007

By George J. Ramos


grocery store isle

In the “PI” (Private Investigation) business, DRM, Inc. has investigated many forms of employee misconduct in the grocery industry. Theft can involve products such as ice cream, lettuce, fruit and vegetables to juices, meat, frozen foods, coffee, and cheese, to dog food to vitamins.

We have seen it all, from employees involved in sabotaging processing and packaging equipment, to excessive volume theft of grocery inventory, substance abuse while working, spitting on food, violence among co-workers, and many other less-than-palatable unmentionables.

Unfortunately these types of illegal activities are on the rise, and referred to in certain industry circles as organized retail crime (OCR). This crime costs employers billions of dollars each year in employee crime-related violations. According to an industry survey system and the FBI, the OCR-type gangs are sophisticated in their operations of grand scale thefts, and usually resell the stolen merchandise at swap meets, smaller markets and on the internet.

Another recently completed survey, The 18th Annual Retail Theft Survey, which covers 24 major retail companies representing 13,313 stores with retail sales exceeding $519 billion (2005), reported thieves stole over $5.8 billion dollars from these retailers in 2005. Even though the survey participants practice true loss prevention strategies, this group of retailers still apprehended over 670,000 shoplifters and dishonest employees in 2005.

Among the top contenders for high risk theft in a supermarket are meat products, over-the-counter drugs, razor blades, health and beauty products and baby formula. However, within the employee arena alone, the cash register and service departments accounted for over 60 % of employee-related thefts.
Whether large or independent, those food retailers that utilized technology, different forms of surveillance, employee hotlines (some with rewards), pre-employment background screening, drug testing, and other methods of investigation decreased their losses. In addition, the employees were well aware of the management’s low tolerance for crimes committed against the business.

The U.S. Department of Justice found that employee theft is the cause of 46% of retail industry loss (Bureau of Justice statistics). According to Business Life 2001, 20% of the workplace population is using alcohol or other drugs in the workplace.

The magnitude of substance abuse in the workplace can result in detrimental affects to the organization. According to the US Department of Labor, substance abusers use approximately 84% more health benefits in dollar terms, and they record 16 times as many work absences. Employees who abuse drugs file six times more workers’ comp claims and cause 65% of workplace accidents, according to a recent OSHA publication.

In mid July 2006, 8 grocery employees were stabbed by a co-worker in Memphis, Tennessee. The attack was the result of a work-related dispute, and was stopped by a customer in the store’s parking lot as the attacker was chasing a fellow worker with a knife. Another workplace study conducted by Rebecca Speer, “Can Workplace Violence be Prevented,” estimated workplace violence cost employers between $6.4 and $36 billion in lost productivity, diminished public image, insurance expenses, and other related factors. Unfortunately, the grocery industry is not immune from this reality.

“Recognition, corrective action, prevention, and training are steps to cultivating and maintaining a safe and profitable business,” stated George Ramos, Managing partner with the investigation firm of Diversified Risk Management, Inc. “The degree to which employee misconduct remains unidentified is determined by how well the employer screens, trains, and supervises employees in the workplace”.

Background screening is correlated with reducing employee theft, workplace violence and drug abuse as well as increasing productivity and protecting your business from negligent hiring risks. Negligent hiring is based on the principal that employers have an obligation to protect their employees and clients from injury caused by their fellow employees.

All employers have an obligation to protect their employees and third parties, such as customers and vendors, from the "foreseeable" acts of an employee. Negligent hiring occurs when an employer fails to contact an applicant's former employers, check references, or conduct a criminal background check prior to hiring the employee.

Awareness and prevention begins with training from a professional and highly experienced educator who knows how to properly handle and present the material to every individual. As another service offered to employers, a trainer can assist the organization in meeting legal requirements, education, and prevention to reduce risk and ensure continued safety. Each team member is an intricate part of the organization, and may gain knowledge through a variety of forms. An appropriate trainer is experienced in understanding the needs of an organization of any size, and tailors the training to meet those needs.

Diversified Risk Management, Inc. is an innovative investigation and risk mitigation consulting firm and is licensed where necessary as required by state law. Our firm has extensive experience in responding to a broad spectrum of workplace and employee related issues through background screening, training, bilingual investigative and security services. We assist organizations of all industries and sizes reduce their liability and achieve measurable results. We help employers reduce risk due to theft, fraud, substance abuse, sexual harassment, workplace violence and criminal activities in the workplace. We gather necessary information and/or evidence and work with appropriate personnel to provide scalable results. Our unique investigative methods allow many clients to exercise appropriate actions without fear of reprisal. We operate throughout North America and abroad. Diversified Risk Management, Inc. is committed to providing long term solutions with uncompromising integrity, quality, and value. To learn more about our services visit our websites at www.drminc.us,www.EmployersChoiceOnline.com, www.ComplianceTrainingGroup.com or call us today at +800.810.9508.