Keeping “After-Hours Hustles” From Draining Your Business
In some workplaces, employees stay late — not to finish pressing company projects — but to use their employers’ resources to pursue unauthorized side work. These workers might use their employers’ equipment and materials, not to mention run up utilities costs. Although side jobs may seem benign relative to outright theft, they can be costly in ways you might not have imagined.
Unexpected risks
Abuse of company resources — for example, computers, printers, paper and electricity — is the most obvious risk of after-hours hustles. Tools used for personal projects may wear out faster or break without direct supervision. What’s more, products created with company tools can blur ownership lines, especially if those products rely on your proprietary technology.
Also consider what might happen if an employee is injured, or injures someone else, while working off-the-clock in your office or factory. Your company could be held liable, especially if a manager knew about the activity and didn’t do anything to stop it. Then there’s the risk of employees claiming overtime for hours they’re actually spending on their own projects.
Employees may think their activities are harmless, particularly if management hasn’t explicitly forbidden such activities or is inconsistent in enforcing rules. But if you don’t establish and enforce rules and monitor workers, side jobs can evolve from one-off projects to routine misuse of resources and ongoing fraud.
Policies and procedures
Stopping employees from engaging in after-hours hustles requires several simple yet effective controls, starting with a written policy prohibiting the practice. Your policy should stipulate what constitutes business property and how it can be used, when employees are allowed to be on your premises, and what approval they need to work on-site after hours. Be explicit about what qualifies as overtime and who must approve it. And make sure the same policies apply to management as to ordinary workers.
Consider these additional control measures to help reduce financial and operational risk:
Monitor and limit access to company facilities. Install a key card system to control access to your facilities. Pay attention to unusual entry and exit patterns and follow up when employees appear to be on-site outside of expected hours.
Install cameras. Visible cameras can reinforce your written policies and key card entry system — and help prevent other criminal activity. Camera footage can also provide information and evidence for official investigations and disciplinary proceedings.
Make surprise visits. Unexpectedly showing up at your facility may help you catch an employee engaging in unauthorized activity. Even if it doesn’t, it can discourage workers who might be tempted to break the rules.
Implement an employee hotline. If you haven’t already, provide workers with an anonymous mechanism (for example, a toll-free tipline or web portal) to report rule infractions and suspected fraud. Often, employees know more about their colleagues’ activities than supervisors do.
Between control and trust
Most employees who work late are on-site to perform legitimate company projects, not to pursue side hustles. So be careful not to accuse someone of misuse or fraud unless you have good evidence of bad intent. After all, you likely want to encourage workers to assume ownership of their work and assert initiative! The best way to prevent after-hours hustles is to balance trust with structure. Contact us to investigate any suspicious activities, conduct a risk assessment and implement internal controls to help prevent financial losses.
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