Employee theft is rampant, causing immense financial and cultural damage across impacted companies. As an entrepreneurship consultant, I want to bring awareness to this issue and provide solutions. In this comprehensive guide, we‘ll uncover eye-opening data on employee theft prevalence, what is being stolen, who the perpetrators are, and how companies can limit risks through education and prevention protocols.
- 22% of small businesses suffer from employee theft
- Retailers saw a 33-44% increase in theft since COVID
- Most common stolen assets are cash, food, supplies
- 1 in 3 perpetrators work in accounting/finance roles
- 76% of employees are fired after being caught
How Widespread is Employee Theft?
Multiple research studies reveal the pervasive nature of employee theft across industries:
- A 2022 survey found 22% of small business owners have dealt with employees stealing from them. With over 90% of U.S. companies being small businesses, this issue impacts over 1.1 million companies.
- Since COVID began in 2020, 33-44% of retailers reported increasing rates of employee theft at their locations. Financial strains of the pandemic are likely a contributing factor.
- In the past 20 years, 79% of employees admit to stealing at least once from an employer, with 75% stealing in just the past couple years. This indicates employee theft is rampant.
[Sources: Business.org, National Retail Federation]
While concerning, these statistics shed light on the ubiquity of employee theft so we can tackle this issue head on with an educational approach.
What Are Employees Stealing?
Employees steal cash, goods, supplies, inventory, data, time, and more:
- The #1 most commonly stolen asset is cash, taken by 92% of employee thieves. Cash is liquid, accessible, and untraceable, creating high temptation even absent ill intent.
- Additionally, 65% steal food and drinks, 26% steal clothing and merch, 21% steal office supplies, and 20% steal electronics. Employees rationalize "borrowing" these items, facing little consequence until quantities spiral out of control.
- Many employees steal time via timesheet fraud, late arrivals, or extended breaks costing employers over $400 billion annually in estimated payroll expansion from such time theft.
So while merchandise and supplies disappear in small quantities, collective cashflow and payroll shrinkage from time theft bears significant unseen financial damage.
Who Commits Employee Theft?
While employee theft transcends age, tenure and authority, patterns emerge in the data:
- 1 in 3 perpetrators hold accounting, finance or management positions. Their extensive system access, oversight authority, and intimate financial details enable higher scale fraud.
- However, lower level hourly staff in frontline roles steal cash, merchandise & supplies in higher frequency despite limited individual impact from each small incident. Opportunity drives risk appetite.
- The longest tenured employees with the most authority steal much more over longer periods with more intellectual schemes that often evade early detection. These complex frauds create immense financial damage despite less frequent occurrence.
So while opportunity plays a key role in an employee‘s propensity to steal, rationalization of unethical behavior admits both younger staff and highly trusted executives into this circle of perpetrators.
Consequences of Employee Theft
Upon discovery, most employees face quick termination:
- A 2022 workforce study found 76% of employees are fired immediately when caught stealing from their employer.
- More trusted roles like executives and managers face lower firing rates around 45% and 66% respectively when caught stealing compared to 76% for general staffers. This exhibits a double standard across authority levels.
- Beyond termination, some employees face criminal charges or civil lawsuits to recover stolen assets and inventory losses attributed to their actions.
While firing stops future theft, it doesn‘t undo the financial, cultural and morale damage already inflicted on the company. Prevention is truly the best medicine when it comes to employee theft.
Preventing Employee Theft
Companies can utilize a combination of approaches to curb employee theft risks:
- Surveillance cameras provide monitoring and evidence for evaluating theft claims. Digital systems today enable remote access and analytics to detect anomalies.
- Routine audits reconcile inventory levels, cash totals, equipment assets and other physical items against transaction logs to catch discrepancies early.
- Anonymous tip lines allow staff to report questionable behavior without jeopardizing their own job. Tips spark over 43% of internal fraud investigations.
- Theft awareness training educates team members on policies, scenarios, ethical approaches, and consequences to reinforce boundaries. Creative, engaging programs yield better adoption.
With a little forethought, companies can develop integrated prevention programs that limit financial risks while promoting an ethical, trusting workplace culture.
As revealed in the data, employee theft afflicts companies of all sizes across most industries. But through education on ethical behavior expectations paired with visible prevention systems like surveillance and routine audits, businesses can constrain threats from within and dedicate focus back to strategic priorities.