It’s thought that 2 in
every 3 small businesses have experienced some type of employee
theft. However in a recent study on criminal activity in the
workplace only 16% of business owners reported the incident to the
police. Why? It’s believed that there are four main reasons. These
are:
No real victims
Beyond firing the
employee most business owners feel that the situation has now been
dealt with and the victimisation isn’t serious enough to warrant any
more of their time and effort. Instead most business owners would
rather move on and forget the incident happened.
Company lawyers
advise against it
In many cases the
company’s lawyer or solicitor will advise against prosecution because
the costs spent (in terms of time and effort) for a successful
prosecution far outweigh any likely benefits the employer may
receive. As an example one employer successfully prosecuted a former
employee who stole $200,000. While the person in question was indeed
convicted and placed on probation they were ordered to pay the
employer back at a paltry rate of just $50.00 per month. It’s
doubtful therefore that the employer will ever recoup the funds taken
from them.
Business owners see
the police or the criminal justice system as ineffective
Often employee theft
involves complex financial situations that are likely to be beyond
the remit of any normal policeman on the street. Other than write up
a report, most business owners believe that the police won’t be able
to do much about the reported crime. Alternatively they may feel that
the police/criminal justice system is stretched and as such, they
choose not to bother the authorities when they could be out catching
‘real criminals’
Employee ties
Perhaps the hardest
part of dealing with employee theft are the possible emotional ties
connected with it. Many employees who have been involved in theft
have worked alongside their employer for many years. The employer
probably knows the person’s spouse and kids and may well see him/her
during a family setting at weekends or during seasonal times. It’s
understandable therefore that many employers simply want to put the
betrayal behind them as quickly as possible and try to move on,
rather than to have to go through it all again.
So now we know the
reasons why employers don’t report internal theft, here are some
statistics which may surprise you:
Most people believe
that employees who steal are generally poor or hard up for cash and
in desperate need. Whereas in truth research has shown that with most
cases of employee theft, they do it for lifestyle enhancement –
holidays, new clothes, new vehicles, or a bigger and better property
In addition research has shown that the money taken isn’t usually a
one off incident, it’s taken in smaller amounts over a long period of
time. This ranges from 2-4 weeks up to 20 years with the average
being around 16 months before the employee was caught. Around 60% of
employee theft occurs by the lowest level employees (eg those with no
managerial responsibility) while the remaining 40% were managers,
executives and those in other roles such as book-keepers,
accountants, and other financial areas.
So how do you ensure
you don’t become a victim to employee theft?
Perhaps one of the best
ways that you can ensure that you don’t become a victim is to carry
out regular security audits, have strong security protocols in place
and run criminal background checks on any new employees before
employing them.
If you’d like further
advice on how to avoid employee theft, contact MA Security. In
addition to providing security personnel to a wide variety of
industries we also carry out security audits and offer advice. Why
not call us on 1300 020 406 and take the first steps
towards protecting your business assets today.
