Preventing Employee Theft
While most employees try to do their best at work, some take advantage of the trust put in them and commit acts such as employee theft. Employee theft is a serious issue because it can affect organizations on two fronts: financially and ethically. In this blog we'll review some important statistics about employee theft, how it impacts businesses, and ways to prevent it going forward.
Statistics About Employee Theft
According to various research sources, the statistics about employee theft are quite staggering. Research has found that...
An astonishing 95% of all businesses in the US are hurt from employee theft
Employee theft costs US businesses $50 billion annually
42.7% of retail shrinkage is due to employee theft
59.1% of employees who commit thefts are male
About 75% of US businesses are affected by time theft
Sweethearting (an employee giving freebies to friends and family without permission) costs businesses about $100 billion annually
The average time detection for fraud is 18 to 24 months
How It Starts
Employee theft is the act of stealing from one's employer, whether it's cash, products or information. Some of the most common forms of employee theft include:
► Skimming money from cash registers or sales transactions
► Taking inventory and charging it to a fake vendor account or reselling stolen goods
► Using corporate credit cards for personal purchases
Typically, an employee starts small by stealing seemingly inconsequential items that would go undetected, such as a few pens, intentionally. From here, theft will escalate into larger and more riskier items. The psychological phenomenon behind this is called moral disengagement, which is what psychologists refer to as a social-cognitive mechanism.
A great example of moral disengagement comes from a case in Texas where a correctional officer in a juvenile detention center stole an estimated $1.3M worth of meat from the facility over time. Once caught, he confessed and stated that while it started small, over time he simply couldn't help himself from committing the crime. In this case, the offender was sentenced to 50 years in prison.
Why Employee Theft Is A Problem
While the answer to this question seems obvious, there are several specific reasons why employee theft is a major concern for businesses. First, it can cut into the bottom line by reducing profits or increasing expenses. Second, employee theft can hurt an organization's image and reputation if word gets out to customers and stakeholders. Finally, there may be legal consequences if companies fail to properly monitor employees' actions and to put in place safeguards against theft.
How Employee Theft Impacts Organizations
Employee theft can have a serious impact on organizations in several ways, including:
► Reducing profits and increasing expenses
► Damaging an organization's reputation and customer relations if word gets out that employees are stealing from the company or not doing their jobs properly
► Creating legal issues if companies fail to adequately monitor employees and put in place safeguards against theft
How Businesses Can Prevent Employee Theft
There are several steps businesses can take to prevent employee theft, including:
► Creating a clear chain of command so that reports of suspicious activity go to the right person
► Conducting regular audits of inventory and financial records
► Implementing security measures such as security cameras with real time notifications, access control with credentials, and the ability for business owners to get notifications about which employees were opening which doors at what time
► Providing employees with clear guidelines on what is considered acceptable behavior and consequences for violating company policy
Employee theft is a serious issue that can impact businesses in several ways. By creating a clear chain of command, conducting regular audits and implementing appropriate security measures, companies can help minimize the risk of theft and protect their bottom line. In addition, businesses should work to create a culture where employees feel comfortable reporting suspicious activity so that problems can be addressed before they get out of hand.
Security technology isn't just to keep the unwanted out, but it's also for ensuring that what goes on inside the building or location is what really should be happening. Give us a call today to find out what solutions we can deploy for your unique needs and business so you can take the sting out of employee theft to your bottom line.
Phone: 866-598-4369
Email: Spencer@genXsecurity.com
Website: www.genXsecurity.com
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