Employee theft

IMAGINE YOU have a breadfruit tree that gives you shade and every day a neighbour passes by and gives the tree one chop with his cutlass. Every day you stand at your window, look at your neighbour chop your breadfruit tree. In the back of your mind, he is just mischievous and the chop is harmless. However, after several months or even years of chopping, one day the tree fell to the ground at the stroke of one chop. You finally realize that the tree was being weakened at the stroke of each chop. Unfortunately, you have no shade. Unfortunately, it is too late for you to do something.

For many employers, the tree is their business, the neighbour is likened to an employee, and the chop is the habit of stealing.

Streamline Telecom Inc. in an article “Opportunity Makes A Thief: What Causes Employees To Steal (And How To Keep It From Happening ToYou)” share some staggering statistics about employee theft. About 75% of all employees have stolen from their employer at least once, and almost 40% of all employees steal repeatedly.

They also reported that US businesses lose $50 billion every year because of employees’ theft.

Approximately 7% of businesses total revenue is stolen by employees.

Businesses lose 15 times more from employees’ theft than from outsiders’ theft.

More than half of employees’ crimes go unnoticed and when they are caught, many employers do not report them to the police.

The American Society of Employers states that 20% of employees are aware of fraud that has taken place at their workplace and 44% say that employers could do more to reduce them.

Today we look at why employees steal and what can be done if anything to mitigate theft by employees. Over the years, I have had to deal with varying levels of theft by employees. From nails and screws, to thousands of dollars. Yes, I have attempted to understand what motivates employees to steal. I have heard persons say that employees will steal if they feel that employers are denying them what is rightfully theirs, or if they feel that they deserve more than they are paid.

Some persons are of the opinion that employees steal because they cannot afford to live off their earnings. Still some people feel that employees who do not have an emotional commitment with the organization will steal. However, I particularly like this phrase by Streamline Telecom Inc.

“Opportunity Makes A Thief.”

While stealing money or store inventory is considered the most common thing that employees steal, the misuse of assets without permission accounts for thousands of dollars of expenses to companies annually. Some of the less conspicuous stealing includes information theft where employees steal trade secrets, formulas, product designs and other confidential information. Some employees steal that information from their employers, then use them to create businesses that compete with their employer’s business. Another example is time theft. Many employees are guilty of falsifying timekeeping records or of using their employers’ time to do personal business. Some employees are also guilty of abusing and misusing office supplies by providing printing services to all their relatives and friends. Or, topping up their toiletries or cleaning supplies from the office for their own use. “It is estimated that businesses lose 20% of every dollar to employee theft, and one out of every three business failures are caused by employee theft.”

What precautions have you taken to mitigate employee theft? In the above referenced article, the author shared a few things employers could do to reduce employee theft, including safeguarding information and property by reducing the number of employees who are given access and remove access when an employee status changes. Invest in surveillance and security camera and review them frequently. When employees are aware the camera footage is looked at outside of the investigation of a crime, it acts as a deterrent.

Conduct risk assessments. Many business owners are not aware of the vulnerabilities within the organization. Risk assessments help you to identify weaknesses and receive recommendation on how to mitigate the risks. Consider inventory tracking software. Businesses that are slow to innovate and use technology will be more vulnerable to inventory theft. Inventory tracking software tracks product in real time. It is worth the investment.

Finally, reassess your hiring practices. Ensure that proper reference checks are conducted on potential candidates before hiring.

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