Why Business Owners Need to Worry About Employee Theft
The risk of owning and operating a business is great. The survival rate for small businesses is shocking after the ten-year mark with only one third making it. There are plenty of reasons that businesses struggle to make it.
One of those reasons is due to employee theft. Read on to find out why business owners need to be on the lookout for employee theft and how it is happening!
What Is Employee Theft?
This is a crime that costs businesses billions of dollars every year. Employee theft happens when an employee takes the property of the business or misuses that property. This dishonesty and disregard for the company may present itself in more than one way.
Types of Employee Theft
There are different types of employee theft that can happen. It may even be more common than you think because of the numerous ways that it happens. In fact, some may not even realize they are doing it and what impact they are causing.
Merchandise or Service Theft
One way that an employee may be stealing from their employer is by stealing merchandise. While you have to worry about people coming into your business and stealing already, you might not think about those in your own circle.
If you are a business that sells products you need to be on the lookout for missing merchandise. Services can be stolen too. This happens when someone takes advantage by using a service without paying.
Misuse of Money
Money can be stolen or misused at any level. This could be someone simply taking cash from the register or safe. Another way this can present itself is when employees use company credit cards for things that do not pertain to the business.
Checks can be an avenue for theft as well. In fact, any misuse of a company asset may be considered employee theft.
Time theft is a form of employee theft that may not immediately come to mind when considering where you are losing out on money. Time theft can be hard to catch if you aren't looking for it.
This happens when someone is using company time for something other than fulfilling their role at the business. It might look like someone leaving early or arriving late but still acting as if they were there.
This might also look like an employee taking a significantly longer lunch or break without noting that they were not present.
Employee discounts are a great way to give back to your employees for their dedication to your business. However, many take advantage of this. You may find that some are taking too many discounts or giving discounts to those who do not qualify for them.
Taking company secrets or protected information is another form of employee theft to look out for. This could be regarding how a product is made, secret recipes, client lists, and other private information.
They may be giving this information to your competitors. This takes away aspects of your competitive advantage and does nothing for the protection of your business.
Employee Theft Statistics
Now that you know what employee theft is, you may be thinking... "my employees wouldn't do that." Here are some disheartening statistics on employee theft which shows how common the problem actually is.
- 75% of employees admit that they have stolen from their employer on at least one occasion.
- Employee theft happens on average for two years before it is detected.
- Those who commit occupational fraud typically have no prior criminal records.
- The cost of employee theft is about $50 million each year in the United States.
- 95% of businesses have experienced employee theft.
Why Does Employee Theft Happen?
Employee theft can be due to several different reasons. A disgruntled employee may feel like they are getting revenge on their employee for something they feel they have been wronged for.
Departing employees may feel like there are no consequences to their actions. They also may feel that they are owed this due to their commitment to the company. This is especially true for information theft.
Although it is not an excuse, certain employees may be experiencing financial hardships that drive them to commit these crimes. Desperate people go to desperate measures.
Not everyone has ill intentions though. There may be those who are doing it for no reason except for something to do or a thrill.
Because there are so many reasons that one may commit employee theft, it makes it increasingly difficult to catch.
Stopping Employee Theft
If you are as worried about employee theft as you should be, you will want to know how you might be able to stop such an act. There are steps that you can take to stop these crimes from happening.
An easy and inexpensive way to protect your business is by installing security cameras. Not only do they help to catch the crimes but they also help to prevent them. Putting these cameras in areas where people would commonly commit certain forms of employee theft will give you the ability to watch when you aren't actually there.
Security cameras can also prevent these things from happening in the first place. When people feel that they are being watched, it greatly decreases the chance they will commit the crime.
If you already have security inside your business, be sure they are watching for the right things. While it is important to watch customers, tell them to look out for the employees as well.
Strengthening your processes may help to prevent certain forms of employee theft. This might mean creating better passwords with fewer people who know them. You might also add in a bag check when leaving shifts.
Ask your employees to be on the lookout for those who are committing these crimes. When everyone holds each other accountable, there is likely to be less bad behavior happening.
Protect Your Business
Business is already risky. Don't let employee theft be the reason that your business topples. Now that you are aware of what to look for and how to protect yourself, be sure to take action.
Need help protecting your business with surveillance systems? Contact us for help!