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Can you trust your employees? Do you think they’ll never steal from you? 

Check this out:

According to the US Chamber of Commerce, three out of four employees have stolen from their employers at least once. As a result, each year, companies lose millions of dollars. And, as the latest employee theft statistics suggest, these numbers are on the rise. 

So, you might be asking yourself: 

What are the reasons for employee theft?

Well, when it comes to the most common types of employee thefts, we can see that most of the employee theft examples happen because:

  • The employee has the opportunity to commit fraud by having access to the merchandise and can successfully cover it.
  • The employee needs more money or is experiencing some type of financial stress. 
  • The employee is dissatisfied at work or feels discriminated against.

While keeping the psychology of employee theft in mind, at The High Court, we decided to go through the most astonishing employee frauds, as well as recent workplace theft statistics

Shocking Employee Theft Statistics (Editors’ Choice)

  • The latest employee theft research shows that 95% of all businesses have experienced employee theft
  • Employee theft that lasts more than 10 years cost companies more than $5.4 million
  • Most employee fraud cases will continue to go on for two years until they are detected.
  • Around 52% of the employees steal office supplies such as pens and paper. They have also used the work printer for personal needs. 
  • 7 out of 10 employee thefts happened in companies that had fewer than 500 employees. Employees in large enterprises are less likely to steal from their employer.
  • Internal theft statistics note that in 26.3% of the employee theft cases, the uncovering was done by a tip from another employee.
  • About 42.7% of the inventory loss in US stores every year is caused by employee theft. 

Statistics on Catching an Employee Stealing 

1. Nearly four in ten respondents experienced two or more cases of embezzlement. 

(Source: Hiscox)

Before 2018, Hiscox studied embezzlement, including active theft cases in the US federal court system. However, for the 2018 embezzlement study, Hiscox surveyed the people responsible for anti-embezzlement and fraud and scam controls in place within their companies. 

The respondent profiles include chief financial officers, controllers, and accountants. All of the respondents have worked in a company where embezzlement has occurred. The study found that close to 40% of respondents have experienced two or more cases of embezzlement.

2. On average, embezzlers have worked for eight years at the company they steal from.

(Source: Hiscox)

Usually, embezzlers have some characteristics in common. A warning sign should be an employee who is intelligent and curious, an egotistical risk-taker, diligent and ambitious, extravagant, and disgruntled. In the hiring stage, embezzlers don’t have the intention to steal from the company. 

On average, embezzlers have worked for eight years at the company they steal from. Clearly, it takes time before an employee becomes familiar enough to feel more comfortable with stealing. During this time, they may find other employees who are willing to join them.

3. The average number of perpetrators in a scheme is three.

(Source: Hiscox)

When more than one employee is willing to steal, the result is a sophisticated scheme. It can be that they all figured out how easy it is to steal from the employer. What started out as employee stealing because of a financial emergency might end up with a scheme in which the regular take increases, sometimes quite drastically. 

In fact, 75% of all embezzlement incidents include more than one perpetrator. Clearly, employees are quite likely to group up and start stealing from the company together.

4. 65% of cases are uncovered by someone in the company who notices something was missing.

(Source: Hiscox)

Employees steal regularly for about a year or two before the scheme is exposed. Oftentimes, one of the perpetrators switches companies or the take increases as they get greedier. But the vast majority of the schemes are exposed by someone in the company who notices something was missing. 

After exposure, the employee may be fired or leave the company without any employer charges. Such action allows perpetrators to move to another company, where they’re likely to start stealing again.

5. In 45% of the total number of theft cases, the companies bring charges.

(Source: Hiscox)

In almost half of all cases, the employers’ actions include bringing charges and demanding employee theft legal responsibility. Regardless of the motive, employee theft may be subject to bringing charges according to the employee theft policy. 

6. Company theft – stealing company property or the personal property of company owners or employees is one of the top five methods and techniques embezzlers use.

(Source: Hiscox)

There are many different methods and techniques employees use to steal. They range from rather simple to quite complex. 

Here’s the scoop:

The top five methods are billing fraud (18%), theft of cash (15%), theft at work and larceny (11%), inaccurately recording payroll and paying fictitious employees (11%), and skimming (9%).

7. The average embezzled amount from employee schemes is $357,650.

(Source: Hiscox)

The stolen funds are not the only problem when it comes to stealing in the workplace. When internal theft happens, employers may face other issues like employee layoffs and loss of customers, as well as additional costs. 

It gets worse:

Other changes associated with employee theft are increased spending on auditing and time spent discussing security, purchasing or enhancing insurance, switching auditors, and adding security.

8. Those with the most access to and control over the money take the most, stealing statistics reveal.

(Source: Hiscox)

People who manage company funds are more likely to be embezzlers. In 75% of the industries studied, managers embezzled more often than employees.

9. Crime is the number one factor for 30% of business failure. 

(Source: US Chamber of Commerce)

As the US Chamber of Commerce employee theft statistics state, employee theft is closely connected to the end of a business. 

According to studies dating back to the 19th century, economic cycles have a lot to do with crime rate. In fact, it goes up during periods of economic recession. However, sociologists have pointed out significant measures to reduce the number of employee theft and embezzlement. 

10. American retailers lose an average of $50 billion annually due to theft. 

(Source: Shopify)

Shop lifting statistics show that 36.5% of company losses are due to shoplifting. The remaining loss of goods from theft in the USA is due to employee theft. Retailers suggest that the only thing that can scare potential shoplifters is surveillance and clear signs that shoplifting is a crime. 


Global Employee Theft Statistics for 2020

employee theft statistics

11. A typical fraud lasts for 14 months before detection and causes a loss of $8,300 per month. 

(Source: 2020 Report To The Nations)

In defining employee theft, we should distinguish between two types of stealing. The term for when an employee steals money from a firm is cash misappropriation. It’s one of the types of fraud under the asset misappropriation category. A different kind of fraud is noncash or misappropriation of inventory and all other assets. 

Nevertheless, both types of fraud are responsible for the great losses that companies experience. Companies lose $8,300 every month due to employee theft. 

12. Theft of noncash property has increased by 10.4% according to employee theft statistics from 2018

(Source: SHRM)

The study included 125 countries, alongside 23 major industry categories. The employees who committed the crimes came from every organization level, starting from entry-level employees to C-suite executives. 

Key takeaway:

Only 10.6% of company frauds were noncash in 2002, compared to 21% in 2018. Click To Tweet

13. 40% of fraudsters have experienced some type of HR-related red flags before they committed fraud.

(Source: SHRM)

Employee stealing time usually starts when they receive a poor performance evaluation, have their benefits cut or reduced, or fear losing their job. According to employee theft statistics from 2019, the greatest triggers were the negative performance results of an employee (14%) that went along with the fear of a job loss (13%).

14. Embezzlement is most likely to happen within organizations that provide financial services. 

(Source: Hiscox)

Although access to funds in relation to the likeability for committing theft remains the same across various industries and types of organizations, the probability for embezzlement varies across different types of organizations. Regardless of type, though, the employees with greater access to funds are more likely to steal. 

However, the employee theft rate is significantly higher in some industries.

Here’s the deal: 

Financial services have the most cases(17%), and NGOs come second with 16%. Even though retail employee theft cases amount to 5%, the median loss is very high because these employees have access to the easiest things to steal.

15. 82% of theft cases happen in organizations with fewer than 150 employees.

(Source: Hiscox)

The company size matters when it comes to workplace stealing. While every company is vulnerable, fraud stats confirm there is a significant correlation between the size of the organization and the likelihood of theft.

The thing is:

Small and medium-sized enterprises have the highest rate of embezzlement cases. The stats suggest that organizations that empower employees and nurture closer collegial relationships are more vulnerable when it comes to stealing. In contrast, larger enterprises are less vulnerable.

And on that note:


Wrap Up

All in all, employee theft statistics suggest that the number of employee thefts remains high. 

With that in mind: 

The situation is quite alarming. What makes it worse is that mostly small business and medium business owners are affected. As a result, they should pay close attention to the psychology of their employees, working closely to remove any source of dissatisfaction. 

Bottom line:

Offering support and being there for the employees will decrease the chances of any type of fraud. 


FAQ

Q: What is the percentage of employee theft?

Employee theft statistics confirm that 75% of employees have stolen something from their employer at least once. Even though the number of employee theft cases has seen a 4% decrease recently, the numbers are still high.

Q: What percentage of shrink is employee theft?

Shoplifting, employee theft, and organized theft account for a shrink of two-thirds each year. For instance, in 2019, the retail shrink reached a total of $61.7 billion. In fact, as the reports suggest, the shrink averaged 1.62% of sales in 2019, up from 1.38% in 2018

Q: How does employee theft affect other employees?

When employee theft happens, both the employer and the other employees will be affected. The fraudster doesn’t just steal from the employer – they steal from the other employees as well. After employee theft occurs, there is a potential for a sense of distrust among employees. So, productivity may decrease because of the employees’ inability to focus on their tasks. 

Q: What are some of the effects on the economy from employee theft?

The economy is affected by employee theft through profit loss, reduction of consumer spending, job loss, and higher taxes. For instance, when shoplifting happens, employers will have to invest into things like alarms, security cameras, and so on. Additionally, there is a rise in mistrust, and the perpetrator, if fired, will struggle to find a new job. 

Q: How often does employee theft occur at banks?

Employee thefts in banks are also known as bank frauds and can be quite common. There are plenty of bank fraud alternatives that are considered white-collar crimes. Quite an astonishing arrest was made on December 13, 2019. According to the FBI statistics on employee theft, a bank employee had stolen $88,000 in cash from the bank vault where he worked. The employee also committed a separate loan fraud and bought a luxury car, employee theft statistics reveal.

Sources:

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