Reduce employee theft: be proactive. Not reactive.

• Author: Brown, Andy
• Position: HR MATTERS

The numbers are staggering. The U.S. Chamber of Commerce estimates 75 percent of all employees engage in some type of theft against their employers and at least half of those who engage in theft do it repeatedly. The Department of Commerce says estimates that employee theft costs employers between $40 billion and $400 billion each year. The range is so wide because 75 percent of all employee theft goes undetected. The problem is so extreme the FBI calls employee theft the fastest growing crime in America. Add the fact that employee theft can be traced to one-third of all business failures in the United States and the magnitude of the problem is clear.

Employee theft is a broad category. It's not just cold hard cash, but also supplies and equipment. Loss of supplies, equipment and inventory is called shrinkage and in a 1998 University of Florida study, Loss Prevention executives attributed 42.7 percent of their annual shrinkage losses to employee theft. Theft, however, includes more than shrinkage and tangible goods. Employees can also steal time by improperly reporting sick leave and vacation or intellectual property and confidential information such as product design or customer lists. Theft can also include actions that hurt employer-employee good will like overcharging clients and pocketing the extra cash.

WHY EMPLOYEES STEAL

While research has shown several reasons why employees steal, money or financial motivation is nowhere near the top of the list. In fact, of the top 10 employee concerns, money or salary concerns rank ninth. Employees do not steal because of need. Strange as it may seem, study after study confirms the simple truth that most employees who steal do so because the opportunity presents itself and they have little fear of discovery.

While opportunity is key, there are factors that push employees to act. Low morale leads employees not only to steal, but also lowers productivity. When an employee feels wronged or mistreated they may steal when the opportunity arises. Likewise, when an employee feels they are underappreciated for the work they do, theft can follow. If a company has no punitive consequences or policies for theft, employees may steal because they think that they won't be punished. Similarly, poor inventory control or a lack of preventative measures can be an open invitation to steal.

10-10-80

Although not scientific, some research suggests that 10 percent of employees will not steal no matter the opportunity...