The Top Five Risks to Your Business

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Top Five Risks To Your Business

Businesses face a variety of threats, both internal and external. While these threats may seem formidable, there are things you can do to protect your business. The first step to combating them is to be aware of what they are. 

  1. Internal Theft

A major risk facing most businesses is internal theft. According to the latest report by the Global Retail Theft Barometer, U.S. retailers lose $42 billion per year due to shrinkage, or inventory loss. The primary sources of shrinkage worldwide are: employee theft, shoplifting, administrative errors and supplier fraud.

American businesses are particularly vulnerable to fraud from the inside. The U.S. Chamber of Commerce estimates that 75 percent of all employees steal from their workplaces. The businesses that are particularly vulnerable to employee fraud are those with a high turnover rate and/or seasonal hiring patterns. Employees who feel overworked, underpaid, underappreciated and/or disconnected from their employer are more likely to steal from their workplaces.

If you haven’t started truly working on the culture of your company, this is yet one more reason why now may be the time to start.  A solid company culture produces just the opposite of these “fraud risk” highlights, you will have lower turnover and employees that feel appreciated and connected.

  1. External Theft

A business is vulnerable to significant losses resulting from a fraudulent activity from external sources. Threats such as shoplifting, burglary, data breaches, and identity theft are not to be ignored or minimized.

In order to combat these risks, a business should have explicit internal policies on data handling, store security, vendor billing, and customer returns. It’s also crucial to train employees in loss prevention, identity theft, and physical security measures.  

  1. Fraudulent Claims

Certain businesses are particularly vulnerable to fraudulent customer claims:  

[I]f you own a store or surface where customers walk or you have a parking lot, you are susceptible to people claiming they fell and injured themselves. If you don’t have any surveillance and safety procedures in place, you are susceptible to frivolous liability complaints.

Spurious claims can also arise internally, from employees. There is a rising concern over workplace safety violations and crimes. A new federal initiative is underway—in partnership with the Occupations Safety and Health Administration (OSHA)—to better pursue and a crackdown on worker safety complaints.

Third-party security services can create greater transparency and trust in the workplace. Video surveillance and security professionals help keep people honest, while also serving as a source of critical information and evidence in the case of litigation.  

  1. Workplace Violence

Most businesses think workplace violence will never happen to them, but the truth is, these threats are very real. The Occupational Safety and Health Administration found that “nearly 2 million American workers report having been victims of workplace violence each year.”

But what is workplace violence, anyway? OSHA defines workplace violence as “any act or threat of physical violence, harassment, intimidation, or other threatening disruptive behavior that occurs at the worksite.” Perpetrators and victims include employees, clients, customers, and visitors.

With a rise in workplace fatalities—due to factors ranging from disgruntled employees to acts of terror—the nationwide approach to workplace violence has shifted from a reactive approach to a proactive one. Every business should have a plan in place that identifies and responds to risk factors and warning signs.

A prevention plan should include thorough employee background investigations, to screen out potentially violent or volatile individuals. In addition, a plan should include employee training in harassment avoidance, personal safety, conflict resolution, and crisis management.

  1. Violent Threats from Outside the Business

Businesses that exchange money with the public or provide services and care, are most vulnerable to outside threats. For example, healthcare professionals, public service workers, customer service agents, retail workers, and delivery drivers are among those at higher risk of encountering violence on the job. If your business falls into this category, then extra precautions should be taken to prevent violent encounters.

SMART Security Pros may be able to help you and your Washington, D.C. Metropolitan area business review and if needed strengthen your overall security strategy.  Feel free to contact us at any time. SMART Security Pros is a provider of armed security services utilizing only active/retired/prior law enforcement officers as well as Remote Guard Video Surveillance services.  Shawn Scarlata is the Founder/CEO and the author of this post.

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