According to the Department for Business & Trade, the retail sector is the UK’s largest private sector employer, employing nearly three million workers. From filling customer-facing roles to high volume hiring, Britain’s retailers face multifaceted staffing challenges. One of the most insidious challenges is shrinkage (an accounting term that measures lost inventory) from intentional employee theft. With news of sentencing by the Bolton crown court for the theft of more than £64,000 worth of smartphones and electronics by insiders at an Amazon warehouse in England, it’s timely to dive into the rise in theft by staff and the role that comprehensive background screening can play in safeguarding your business.
The Escalating Problem of Employee Theft
Even though external theft, when a customer steals something, surpasses internal theft as the largest contributor to overall retail loss, internal theft remains the second largest contributor of loss, and its prevention must be a key part of any retailer’s asset protection program. Practices such as concealing merchandise and stealthily removing it during breaks, putting merchandise in the rubbish bin or other concealed containers for later theft, wearing unpaid merchandise out of the store, and passing off merchandise to friends or accomplices who look like ordinary customers (“sweethearting”) are all a part of internal theft. Theft also takes place in sprawling warehouses and in distribution centres.
New research by security technology firm Thruvision and the consultancy Retail Economics concludes that retailers are losing an estimated £3 billion a year from internal theft. The British Retail Consortium’s BRC Crime Survey 2023, with insights based on a sample from retailers representing over 1.3 million employees, estimates more conservative employee-generated losses to the tune of £39 million.
North American research reveals a similar troubling trend: according to the National Retail Federation’s 2023 Retail Security Survey, internal theft alone contributes to 30% of total retail losses in the United States (Thruvision and Retail Economics place the UK percentage at 40% in their research), representing a 10% increase over the previous year.
Regardless of which estimates you consult, this form of retail crime warrants recognition and to be addressed. This surge in dishonest employee behaviour underscores the pressing need for proactive background screening measures to mitigate risks and protect retail businesses from financial losses and damage to their reputations.
The UK government publishes reports and guidance documents on retail crime prevention and loss reduction strategies, offering valuable resources for businesses. In their policy paper, Fighting retail crime: more action. Over the past several years, retailers have increased their use of technologies to deter, detect, and investigate internal theft such as increased training, tip hotlines and tip rewards, exception-based reporting software and programs, CCTV systems and video, and point-of-sale transactions/system anomaly notifications and alerts.
Additionally, there are also protocols you can adopt at the pre-employment background screening stage to deter bad actors from joining the team.
The Value of Background Screening
Amid this backdrop of escalating employee-related risks, background screening emerges as a helpful tool for retail businesses to fortify their defenses against internal theft. By implementing robust screening protocols, you can gain invaluable insights into the integrity, reliability, and trustworthiness of prospective employees. Through meticulous criminal record checks, employment history, financial integrity, and professional qualifications, businesses can identify red flags indicative of potential risks and make more informed hiring decisions.
Incorporating background screening and background checks as part of the pre-employment screening process can act as a deterrent to potential insider threats. The knowledge that their past will be thoroughly assessed may dissuade individuals with criminal intent from applying or attempting collusion. The mere presence of such assessments sends a clear message that you prioritise security and are committed to preventing organised retail criminal acts. Background screening not only serves as a deterrent to dishonest behaviour, but also cultivates a culture of accountability and integrity within your organisation.
Criminal Record Checks
A Basic Level DBS (Disclosure and Barring Service) check is a thorough investigation into an individual’s criminal record history. The Basic DBS check provides information about unspent convictions held on the Police National Computer (PNC) in the UK. With full consent, this level of criminal record check can be conducted on anyone working in any position within the retail sector.
Employment History Checking Service
Hiring the wrong person can put your business at risk. You can minimise risk by ensuring you have all the information about a candidate before hiring them with our employment history checking service. This background screening service involves verifying the accuracy and completeness of a job candidate’s employment history and typically includes contacting previous employers to confirm dates of employment, job titles, responsibilities, and sometimes reasons for leaving. These checks can also uncover any discrepancies or gaps in employment that may raise concerns about the candidate’s reliability or integrity.
Financial Checks
Retail businesses often handle large amounts of cash and financial transactions, making them vulnerable to internal theft or fraud. Financial checks can reveal signs of financial stress, such as bankruptcies, county court judgments (CCJs), or Individual Voluntary Arrangements (IVAs). These indicators may suggest that an individual is facing financial difficulties, which could potentially impact their reliability or susceptibility to financial temptation.
Professional Qualifications Checks
Certain retail positions may require employees to hold professional certifications or licences to comply with industry regulations or legal requirements (e.g., driver’s licence, accountancy training, etc.). Conducting professional qualifications checks helps you ensure that candidates meet these regulatory standards and are eligible to perform the duties associated with their role.
Hiring candidates with relevant professional qualifications may also reduce the need for extensive training and onboarding, saving time and resources for the employer. Employees who already possess the required skills and knowledge can likely contribute to the business more quickly and effectively.
Navigating Legal and Ethical Considerations of Background Screening
While background screening offers undeniable benefits, it’s essential to navigate legal and ethical considerations to ensure compliance with relevant regulations and protect the rights of candidates.
UK employers must adhere to various employment laws and regulations when conducting background screening on candidates for jobs. Some key legal considerations include:
- Data Protection Act 2018 (DPA): Employers must comply with the DPA, which regulates the processing of personal data. This includes ensuring that the collection, storage, and use of candidates’ personal information during background checks are lawful, fair, and transparent. Employers must also obtain candidates’ consent before conducting certain types of background checks.
- General Data Protection Regulation (GDPR): The GDPR, which is incorporated into UK law by the DPA, imposes additional requirements on the processing of personal data. Employers must ensure that their background screening processes comply with GDPR principles, such as data minimization, accuracy, and security.
- Equality Act 2010: Employers must not discriminate against candidates on the basis of protected characteristics, such as race, gender, disability, religion, or age, during the background screening process. All background checks must be conducted fairly and without bias to avoid potential claims of discrimination.
- The Rehabilitation of Offenders Act 1974 (ROA): The ROA sets out rules regarding the disclosure of criminal records by job applicants. Employers must be aware of the Rehabilitation Periods specified in the Act, which determine when certain convictions become spent and do not have to be disclosed by the candidate.
- Right to Work Checks: Employers are required to conduct right to work checks to verify that candidates have the legal right to work in the UK. These checks help prevent illegal working and ensure compliance with immigration laws.
- Fair Credit Reporting Act (FCRA) Compliance (for international checks): If conducting international background checks, employers must comply with the FCRA if the candidate has lived or worked in the US. The FCRA imposes requirements on the collection, use, and dissemination of consumer information, including criminal records and credit reports.
By adhering to these employment laws and regulations, UK employers can ensure that their background screening processes are conducted legally, ethically, and effectively, while also protecting the rights of candidates.
Leading Retail Industry Background Screening
In conclusion, the increase in internal employee theft underscores the critical importance of robust background screening practices in the retail sector. Background screening empowers retailers to make informed hiring decisions, foster a culture of trust and accountability, and fortify their defences against internal theft and retail shrinkage.
How can we help you with your retail industry hiring demands?
We’ve designed a workflow for background checks in the retail industry where quick screening is important for an on-demand workforce and seasonal peaks. Personnel in your retail business who should undergo background checks include:
- Shop Assistant
- Retail Assistant
- Customer Service Representative
- Warehouse Worker
- Manager
- Supervisor
- Delivery Driver
Fast Turnaround Times
Retail employers need fast hires. Our background screening and pre-employment background checks provide quick results – ideal for people like you tasked with retail industry hiring. Depending on the check you run, you can have the background check completed in mere minutes or hours instead of days through our online processes.
Seamless, Integrated Screening
Our automated screening allows you to request background checks in several easy ways. We can integrate our background checks into the retail hiring software you already use. That way, your applicants can complete the background check step as part of the onboarding process. Integration to platforms such as Workable, Workday, Fountain, and Greenhouse helps your business stay on top of screening. We can also white-label the screening step for your company so you can email an invitation to a prospective employee that matches your candidate experience.
Bulk Hiring Capabilities
Our platform is built to handle high volumes and can support large hiring events such as seasonal job fairs, warehouse hiring sprees, and store expansions. Clients can also combine checks into vetting packages and request industry-specific screening with the click of one button.
Mobile Functionality
With our easy-to-use platform, you can perform all the checks you need to make – in whatever location – to get the full picture and find the best employee for the job. According to recruitment benchmarks, 69% of retail job applications are completed on a phone. Why not extend your screening experience to a smartphone as well to reduce candidate drop-off?
With our help, you get employment background screening that helps you make informed decisions at cost-effective prices, so you hire the best-qualified candidates. If you’re not sure which products or services fit your retail industry hiring needs best, request a quote and we’ll get back to you.
