Crime statistics show that thefts and burglaries increase during difficult economic times. So it makes sense that employee theft would increase as well. The news is filled with stories like the one from Minneapolis of a man who stole nearly $1 million from his employer, a wrecker company. It took him four years, but he managed to embezzle over $933,000 by cashing checks made out to the business or to vendors.

Theft is not always in the form of cash—but it can cost businesses plenty of that, too. Two Starwood Hotel executives stole information about its brand and used it to develop a competing hotel. Over 10,000 electronic and hard-copy files were stolen in this case, which resulted in a lawsuit against the competitor as well as the two employees.

Even your coffee server could be skimming money from her employer. One Dunkin’ Donuts employee admitted to ringing up sales for less, taking the full amount from the customer, and pocketing the difference. The woman claimed that it was in retaliation for having her hours cut due to the recession. She’s never been caught, although it seems like a few safeguards would make that easy. Requiring receipts would show customers that they are paying $2.00 for a coffee that’s being entered at $1.50. And keeping inventory on coffee cups, comparing them to sales by size, would indicate a discrepancy between what’s being entered on the cash register and what’s going out the door.

Most employers avoid the attention and bad publicity of employee-theft cases, so they don’t always prosecute—which only serves to prevent future employers from knowing the full criminal history on the thief.

Employee theft can happen anywhere, whether your business is “like a family” or a large, more corporate environment. School employees and coaches. Cashiers. Managers. Law firm assistants. Police records are full of scenarios where employers “can’t believe” an employee would steal from them.

The best way to prevent employee theft is to know whom you are hiring. And the best way to know that is to conduct thorough, professional background screening on every potential employee. You’ll know whether they are living among their means with a credit check and whether they have a criminal history with a criminal background check. Even whether they move around a lot to avoid paying back rent, or have evictions on their records—putting together a complete picture of a potential employee is one excellent means of stopping employee theft before it happens to you—especially in this economy.

Employment numbers are lagging indicators of the economy. While Gross Domestic Product gained 3.5% in the third quarter of 2009, payrolls continued to fall. Job losses announced in November were 11,000. The number is the lowest monthly job loss since December 2007 and the eighth consecutive month where losses were fewer than the month before. As we close out 2009, what is the U.S. employment outlook for next year?

Unemployment is expected to peak sometime next year, and remain around 10% through 2010 and into 2011. However, the huge losses suffered at the beginning of 2009, when 700,000 jobs were lost per month appear to be behind us.

In addition, temp jobs increased in November, and unemployment fell by 0.2% to 10%. Economists had expected an unchanged rate, so the drop is a good sign. The Labor Department also revised job losses for September and October, form 190,000 to 111,000 in October, and from 219,000 to 139,000 in September.

Other indicators are strengthening as well. The stock market is up and business investment in equipment and software increased in the third quarter.  According to economists, meaningful job growth is expected by the end of 2010, spurred both by federal government investment and private employer hiring. Additional indicators: consumer spending was up in November by .5%, while personal incomes were up .4%.

The average number of hours worked each week has fallen throughout the recession. But in November, the average workweek increased by .2 hour to 33.2 hours. The manufacturing workweek increased .3 hour to 40.4 hours. Still, there are 15.4 million unemployed persons in the U.S. and the number of folks working part-time due to cut hours or inability to find full-time work was little changed at 9.2%.

Americans are working hard; productivity is growing. Output rose by 4% while number of hours fell by 5%. This indicates that employers are doing more with less—and may not need to add workers just yet.

But in the long run, increasing productivity is expected to increase demand for workers, as well. What is your company’s employment plan for 2010?

What makes employees happy and loyal? Company culture, extra perks, feeling appreciated by their employers—all of these factors are important, but they are not the deciding ones when employees are faced with the decision: “should I stay or should I go?”  The two things employees put at the top of the list are pay and benefits.

According to a survey conducted for the last three years by a Florida staffing firm, compensation and benefits are the most important thing in their relationships with their employers.

Although fewer workers have quit jobs this year (according to the U.S. Department of Labor), history suggests that workers who are unhappy will start looking for employment elsewhere as the economy improves. And the main reason they’re unhappy?  Their pay has been cut during the recession.

One study, conducted last May, showed that employees at 235 large U.S. firms are less committed to their employers—so those firms who managed to keep their strongest people during the recession may be at risk of losing them.

What can employers do to hold on to good employees?

1. Make up for pay cuts: it’s a sure way of making affected employees happier. And if you plan on giving raises, say so! Now is not the time for surprises—people need reassurance more than ever. So don’t keep plans to yourself, or use a pay raise to bargain with an employee after they announce they’re quitting.

2. If you promise a pay raise, follow through: nothing is worse than making a promise and not delivering on it.

3. Be flexible: We’ve shared lots of ideas in this blog about boosting morale and supporting employees’ needs. Sometimes it can make up for lower pay—but not always.

4. Pay a performance bonus: If you can, write a bonus plan that rewards your staff for meeting objectives. Pay-for-performance is a good way to give a sense of ownership and commitment.

5. Be open and accountable: if management is getting raises and bonuses, and staff is not, be prepared to explain why.

Employers who cut staff to deal with a business slowdown, often experience a slowdown in worker productivity, too. Here are some free ways to boost it back up.

Be flexible: Not only do employees who work for managers they consider flexible produce more work, they are healthier. A recent study undertaken by eight federally-funded research teams in the U.S. show that employers’ policies affect employees in ways they might not have imagined. Cardiovascular disease is twice as prevalent in employees who have bosses unwilling to work with them on family issues like caring for sick children.

Employers with a culture of flexibility, such as remote work programs and flex hours, have workers who sleep an average of 30 minutes more per night. The same study reported that nearly 80 percent of workers want flexible work schedules, but many believe they will be overlooked for advancement if they ask for it.

The study also shows that businesses with open and flexible cultures have more engaged and supportive employees, and much less turnover.

Be supportive: Employers and workers are both feeling the strain of job cutbacks, losses in sales and profits, and an uncertain future. However, employers should try to be as supportive of their remaining employees as they are demanding of them. Listen to employees’ needs and suggestions, especially when re-prioritizing duties are necessary. Some tasks may have to be eliminated when staffing is decreased. Be empathetic to what your employees can physically and emotionally take on.

Be inclusive: When employers ask workers to take on more responsibility, productivity can be negatively affected. Consider giving your best workers leadership roles and the titles that go with them when you ask them to work longer and harder. A sense of ownership can boost morale and productivity.

The number of Americans who are unemployed seems to be stabilizing somewhat, but even those employees who have made it through your company’s toughest times may still be wary, worried, and waiting for their job to be taken away.  With stress at home, unemployed partners, and shrinking household incomes, combined with increased workloads and more on-the-job stress, your staff could be more nervous than ever. Fear leads to unusual or out-of-character behavior. Employers should be aware of changes in their employees—and be willing to try new ways of dealing with old issues.

The continued downturn in the economy can seem like uncharted territory—so just as you drive more cautiously when you don’t know where you’re going, employers should proceed with caution when dealing with employee issues like layoffs and evaluations.

For example, your employees might be more sensitive to criticism. When stresses combine with a feeling that their job could be in jeopardy, even the most even-tempered employee could react uncharacteristically. Employers should take extra time to explain any issues related to performance, suggest ways to improve, and if the problem is not job-threatening, be sure to say so! Never assume your employee knows anything that you don’t directly communicate to them.

During times of stress, employees could become more aggressive about negative evaluations. This isn’t to say that evaluations should be soft-pedaled or toned down to avoid upsetting your team members. Just be sure that negative scores or observations can be backed up with solid evidence, such as incident reports, notes, or other appropriate documentation. Still, employers should prepare for formal challenges from staff members who fear that a poor performance evaluation could lead to losing their job.

Employers should also be cautious about layoffs. A downturn in business can be the sole reason for letting employees go—but that does not preclude an older laid off employee from filing a discrimination case, or an employee whose religious practices differ from yours from hiring an employment lawyer.

So be fair, be sensitive to employee stress, and always keep the lines of communication open with all of your employees. If they are aware of your company’s challenges, feel that they are being treated fairly, and know exactly where they stand, your staff will be more accepting of criticism, poor evaluations, and even lay offs.

In our current economy, employers see bad news and leading indicators that affect them every day. One week employment is up; the next week construction spending is down. First, economists predict the recession will be over by the fourth quarter of 2009, and then the US Treasury Secretary says it’s going to take more time to see real recovery. Roller coasters will give employers a smoother ride than the news will!

If you need a chuckle to get you through the week, take a look at what hiring managers are hearing from their employees—including these very odd complaints, reported by CareerBuilder in a recent survey.

Some complaints were about fellow employees:

• Is too sun-tanned.
• Has big hair.
• Eats all the good cookies.
• Is so polite, it’s infuriating.
• Is trying to poison me.
• Their body is magnetic and keeps de-activating my magnetic access card.
• Aura is wrong.
• Breathes too loudly.
• Has ticks.
• Wears pajamas/socks/slippers to work.
• Wears bells on her shoes.
• Reminds me of Bambi.

Others were about the company:

• Doesn’t provide a place for naps during break time.
• 8:00 a.m. is too early to begin work.

Sometimes, we just have to laugh at what makes people upset in the workplace!

As we wait for our economy to come out of recession, smart employers will continue to find ways to invest in employees to keep their companies going strong.

One way to do it is to keep working on your company culture—which we’ve discussed previously in this blog. An important thing to remember is that creating a strong company culture isn’t about spending money. It’s about bringing employees into a shared vision and purpose.

How do you find the people who share your company’s vision and purpose? Look for a passion for what you’re doing. It can’t always be about the money—especially in this economy! Employees understand that companies are cutting expenses, perks, and benefits. Belief in what their employer is doing is more important to many young people today.

Your company’s culture is based in the leadership from the top—so it’s up to you to give your employees what they’re looking for. These days, more employers are offering a relaxed work environment, flexible hours, and telecommuting. But every employer can provide the upbeat, vibrant surroundings, positive feedback, and learning opportunities that make employees want to stay and help the company achieve success.

How do you get employees to buy into your leadership? Your employees want to learn and be challenged. Be transparent to help them learn everything about you and your company. Give them opportunities to stretch and grow. Invest in your employees by training them properly and giving them the tools they need to succeed at their jobs.

Think about recruiting your employees even after they’ve been hired. Recruit their ideas, their input, their buy in, and their loyalty. And institute their suggestions for improvements–nothing makes employees happier than to see a suggestion acted upon.

If you invest wisely in your people, they will want to support you and the company’s vision—because it’s their vision, too.

A company culture of strong leadership doesn’t cost anything—and it leads to higher productivity, lower turnover, and greater customer satisfaction.

Tom Colicchio is a celebrity chef and host of TV’s popular reality show, Top Chef. He’s also a successful, multiple restaurant owner. Tom is not what you’d call Mr. Nice Guy on Top Chef; he’s tough, but fair. We imagine he’s like that in his restaurants, too.

And as in all businesses large and small, the economy has given restaurant owners even more challenges. Maintaining high quality in product and service levels is always difficult, but when people are not spending as much on eating out, restaurants have to find ways to control and cut costs wherever they can.

Tom offered some advice in a recent interview that applies to every business owner: instead of issuing new rules and orders to your employees, engage them in finding real solutions. Tom finds employees are more willing to help and work with you when the economy is down—after all, they’re afraid of losing their jobs, too.

An example: in one of his restaurants, the monthly bill for replacing china and glassware is typically $3,000. Wow! That sounds like a lot of wasted pottery, glass, and money!

Instead of just telling his staff to be more careful, Tom asked the question: Why are we breaking so many dishes and glasses?  It turned out the dishwashing area (the dishpit) was stainless steel—not the most forgiving material for hurried bussers and dishwashers. So they created a new system, padding the area with rubber. The result? Dishes can now hit the floor or the counter without breaking. A simple, lasting solution to a very expensive problem.

Every business owner has felt frustrated at the seemingly endless ways money gets sucked out of their bank account. And most employees have felt the wrath of their boss issuing loud orders to stop wasting supplies, making mistakes, and filling garbage cans instead of the cash register.

There is a better way. If you need to cut expenses, don’t just issue orders and institute new rules; engage your staff to help find solutions that will prevent the problem in the first place.  It’s not enough to say “We have a problem.” Ask “Why do we have this problem?” And ask it of everyone involved in the process you want to fix.

As Tom Colicchio put it, “(If) you talk to a dishwasher, they’ll tell you why things are breaking.”