July 30th, 2014 | Sterling
The Rise Of Employee Theft Is Criminal
Kessler International conducted a survey and found that 95% of employees steal from their employers. That’s right – a shocking 95%. That staggering figure implies that someone in your organization is probably taking more than you bargained for.
Employee theft occurs in many forms including stolen time, pilfered office supplies, personal use of company equipment, abuse of corporate intelligence, or outright theft of inventory. The research shows that it happens more than you think.
The research also revealed that:
- 30% of employees falsify time records.
- 80% of employees use computers or smart phones for personal activity while at work.
- 52% of employees steal office supplies or use company equipment for personal use.
- 18% of employees take corporate intelligence, including trade secrets or customer lists.
- 35% of employees steal goods or services.
It certainly makes you wonder how businesses manage to stay in the black. And unfortunately for business owners, employee theft and the value of the stolen assets continues to rise.
Caught Red Handed with $50 Million
A study by Jack L. Hayes International analyzed data for 23 large retail companies and found that 71,095 employees were apprehended for employee theft in 2012, a 5.5 percent increase over the previous year.
Not only were there more employees caught stealing, but more than $50 million was recovered, which is 7 percent more than 2011. Employee theft is without a doubt on the rise and the trickle down effect is wide spread. Rising annual losses due to fraud and theft translate into higher prices for customers and less profit for employers. It’s a no-win situation.
Stealing From the Hand That Feeds Them
In Kessler International’s survey, they found that younger employees believed that they were “owed” more from their employers, which is how they justified their theft. While it wouldn’t be fair or accurate to stereotype every young employee, the survey provides some evidence of a generational mentality and work ethic.
Another driving factor is the significant cuts to staffing and labor costs made by increasingly cost-conscious companies. With fewer staff, comes less supervision and a lower probability of getting busted.
Employers have also cut corners on pre-employment screening. In an effort to reduce costs, some employers are being less thorough in their screening practices and may miss important records relating to a history of theft and questionable behavior.
Penny Wise, Pound Foolish
Conducting a lesser background check in order to save a few dollars might sound like a good idea in the short term, but it can compromise the effectiveness of your screening policy and ultimately cost you more in the long run. How can you prevent employee theft with pre-employment screening? One way is to make an informed and knowledgeable hiring decision. Beef up your background screening efforts by adding more locator tools to your searches for a broader scope.
Background screening can also prevent or minimize theft with a consistent policy for post-hire monitoring. Just because your employee didn’t have a criminal record when you hired them, doesn’t mean that they will stay out of trouble while they work for you.
Self-reporting only goes so far, which is where SterlingBackcheck’s Employee Risk Alerts come in. Employee Risk Alerts notify you if an employee is arrested by searching a real-time victim notification database. You can opt for daily, quarterly, or one-time audit searches. SterlingBackcheck is the only background screening provider that offers a post-hire service like Employee Risk Alerts to help protect your organization from potential internal theft.
This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.