You might not know this, but 30% of business failures are due primarily to employee theft, according to a recent Profiles International report on workplace fraud, theft, and violence. Additionally, a study by the University of Florida estimates that employee theft is the cause of nearly 48% of inventory shrinkage in business. Annually, that’s over $15 billion in losses or in excess of $1,300 per employee.
There are steps that employers can take to reduce their exposure including implementing well-developed theft prevention plans and conducting background checks on new hires, employees, vendors, and contractors.
More Statistics on Workplace Theft
The typical first-time theft is generally small. However, once someone realizes it’s easy, they up the ante. Each time they escape detection, they become more brazen, until they’ve taken thousands of dollars.
Here’s what Profiles International reports:
- 61% of theft is committed by well-educated males in senior executive positions
- Workplace theft is the “fastest growing crime in America” (FBI)
- 75% of employees steal from work repeatedly (U.S. Chamber of Commerce)
- Employee theft causes 33% of all U.S. corporate bankruptcies
- U.S. companies lose nearly $400 billion per year due to “time theft” or loafing
If you’re not already focused on employee loss prevention, it’s time to recognize the impact it can have on your business.
Steps Companies Should Take to Reduce Workplace Theft
You have options. To protect you and your business against workplace theft, consider these five steps:
- Create a zero-tolerance work environment by clearly communicating you are committed to “honesty and ethically sound decisions”
- Establish and communicate regularly written policies including one on Ethics
- Implement and monitor internal controls that segregate duties such as authorizing and signing checks
- Take actions that communicate crimes such as theft will not go undetected or unpunished
- Make background checks a routine part of employment processes such as hiring, promotions, and transfers
That’s where we can help. TruDiligence has over 20 years in the business as a full service background check and investigative firm specializing in FCRA compliant employment screening. For more information on our services or to arrange for confidential screenings on your employees, contact us.