Empty shelves at Shoprite Lugogo branch as the retail chain winds down its operations in UgandaA businessman in Masaka told me: “I had the biggest supermarket here in Masaka, but because I wasn’t available to supervise, and my wife wasn’t so keen, the workers stole from us until we ended up in debt and the supermarket couldn’t run. You bring someone into your business, but they come with a different plan: to steal from you and start their own.” A colleague in the mobile-money business has, more than once, seen young men who deliver float to his agents disappear with the money. One of them vanished with about Shs 10 million. Another colleague, who owns guest houses, had a humble-looking cashier who delivered about Shs 2 million every morning. He never missed a day and never went home, even during the Christmas holidays. When his mother died, he went for the burial only after he was pushed. While he was away, his replacement collected more than Shs 4 million every night. That is when my colleague learnt that the cashier had been stealing for about five years. He fired him after he returned from the burial. In my interviews with business owners across the country, this challenge keeps coming up. Theft can go unnoticed for years. Many owners find out only when the business is collapsing or has already collapsed. Dishonest workers study the business and the owner’s routine, then exploit any loophole. Theft takes many forms. An employee may skip the receipt when a customer does not seem to mind, or claim the receipt machine is down, and keep the money. Some buy poor-quality goods or ask suppliers to inflate prices, then pocket the difference. Others give customers a mobile-money number that does not belong to the business. Some even sell their own goods in the owner’s shop. The shelves look full when the owner returns, but customers have been buying the employee’s products. The problem is worse for business owners who do not keep records. A businesswoman in Mbale told me: “I don’t record, but provided I see cash coming into my pocket, I know the business is doing well.” A study by the Economic Policy Research Centre (EPRC), based on 2021 data, showed that almost half of fully informal businesses kept no records at all. Without records or data, an owner cannot track performance, spot anything unusual or tell whether the cash coming in is all the business should have earned. Why do employees steal? The first reason is low pay. Many workers are paid as little as Shs 5,000–10,000 a day, from which they pay for transport and meals, while bringing in millions. Some of these workers have families to take care of and are forced by the situation to steal. This does not justify theft, but it helps to explain it. The second reason is a lack of integrity. Some people are simply thieves who, from their first day, think only about how to steal. Even a fair wage would not stop them. The third is the get-rich-quick mentality, made worse by social media. Young workers see friends online showing off phones, clothes, cars and outings. Earning little, they feel left behind and try to keep up. The business’s money becomes the easiest way to close the gap. Finally, weak systems make theft easy, and when everyone else seems to be stealing, it starts to appear normal. What business owners can do Keep records from day one, and check them daily against cash, mobile-money receipts and bank deposits. A simple electronic data system makes this far easier than recording in exercise books: it tracks performance, flags anything unusual, costs less than hiring someone and lets the owner follow the business from anywhere. Pay workers a meaningful wage. Paying peanuts to someone who brings in customers and millions of shillings only tempts them. Reward them well enough that stealing would feel like a sin, and that they would report thieves rather than join them. Do not over-trust employees, however good they seem. Supervise the business closely and change the staff who handle money as often as possible. Anyone unable to supervise should think twice before starting a business. Install cameras and check workers as they arrive and leave. It may feel uncomfortable, but it can save a business. Dismiss anyone caught stealing, and have them arrested and prosecuted, as a warning to others. Employee theft kills small businesses slowly and quietly. Money disappears a little at a time, often for years, until the owner is left with debts and empty shelves. Small businesses need capital, but they must also be able to safeguard it from theft. The writer is an Executive Director at Blueprint Consortium Africa.The post Employee theft killing Uganda’s small businesses appeared first on The Observer Media Ltd.