Businesses must prepare for the risks that come with seasonal employees

The holiday season has come and gone with the start of the new year, but many businesses may be wishing for a redo. In hindsight, some have realized they didn’t employ the best hiring practices with their seasonal workers.

In a race to avoid being understaffed during the holiday season, businesses employ seasonal workers to help with the influx of shoppers. But the rush to hire comes at a time when employee theft is on the rise. According to the National Retail Federation, losses from employee theft are now equal to those from shoplifting (33.2% of inventory shrinkage comes from internal theft versus 35.7% from external theft/shoplifting).

With the stakes this high, are employers taking the proper steps to screen candidates, train employees and monitor for theft? If not, what can do they the next time they’re in need of seasonal employees. Scott Humphrey, 2VP, Risk Control, Travelers, reveals what employers should keep in mind.

Related: Examining temporary staffing agency risks

Seasonal employees come with risks

The issue of employee theft isn’t an easy task to manage — and the problem is only exacerbated with the onboarding of seasonal employees. Additional employees enhance the likelihood for products to be taken without being noticed.

Humphrey first recommends “that businesses stick to their normal hiring standards and processes despite the time crunch.” Employees who may only be employed for a few weeks or months can still adversely affect a business’ operations and its bottom line.

Additionally, with all the activity in the front end of a retail store, it can be difficult to detect an employee pocketing money from a register. Humphrey also recommends managers review the transactions that occur each day in addition to reviewing security camera footage. Another option managers can consider is requiring each employee to sign in to a register with a unique password or username so a record of who had access to what at certain times is established.

Think, plan, then hire 

Maintaining normal hiring standards and processes when time is limited requires planning ahead.

“Understanding your busy seasons can help you determine when to bring on additional employees with enough time to go through the formal hiring and training process. That’s why understanding your business and planning are critical to avoiding a last-minute hiring crunch, which can lead to rushing the hiring process and relaxing standards,” says Humphrey.

It’s also important to have a well-written and straightforward job description when posting for an open position. And if businesses hire seasonal employees with the expectation that they will drive, Humphrey says “verifying that they have valid licenses and checking their driving history can help spot risky drivers and help to reduce the risk of auto accidents.”

Related: Do you need a driver’s license to buy auto insurance?

Training is essential, but don’t forget about insurance

An employer should ensure their training programs are consistent whether their employees are seasonal or full-time. A training program should focus on outlining job responsibilities, company policies and addressing safety issues.

For starters, management can lead by example by adhering to safety protocols and attending safety meetings. Regarding theft, Humphrey says employers should emphasize “there’s a zero-tolerance policy and that it is grounds for immediate termination.”

But no business is complete without insurance.

“We suggest businesses talk to their agents or brokers to discuss specific coverage options and to understand current limits and potential new exposures,” says Humphrey. For example, if new employees will be driving on behalf of a business, it’s important to check whether they are included in a business’ commercial auto policy. Workers’ compensation insurance is another important policy to review to ensure there is coverage available for seasonal staff.

At this point in the new year, seasonal employees may not seem like a priority for some businesses. But as always, the holiday season will be back in full swing before long. A business’ need for seasonal employees may not change, but how prepared they are for the risks such workers come with should.

Related: What coverage applies to alleged thefts by employees?