Updated May 23, 2022

Employee Theft Statistics: Why Entrepreneurs Should Worry

Read more about Business

Employee theft can be disheartening to deal with. Here are some key statistics which shed light on the problem and help prevention.

Employee theft can be a difficult conversation. Especially for smaller businesses. No one wants to believe the people they work closely with are stealing. The people they chose to help them make their dream a reality.

The truth is, employee theft is prevalent. And it is something many businesses have to deal with. It can be as simple as swiping a friend's purchase. Or clocking in for a work friend. It could also be a CFO causing millions in losses.

But, there are many ways you can prevent it. And there are tricks to detecting it.

So, let's take a look at the numbers.

Retail Employee Theft

According to NRF 2020 losses from theft, fraud, and shrinkage in retail were over $61.7 billion. And a Statistic Brain report states that 75% of employees have stolen least once from their employer.

Employee Theft vs Shoplifters
Jack L. Hayes International's Annual Retail Theft Survey studied 23 major retailers:

  • In 2020, they found 26,463 dishonest employee apprehensions.
  • In 2012, this number was more than triple in size, with 71,095 such apprehensions.

All these incidents can cost a business serious money.

The National Retail Federation's 2021 survey found that employee theft costs retailers an average of $1,551.66 per case. Whereas shoplifting only cost around $461.86.

In 2012, the same survey concluded that losses due to employee theft, shoplifting, paperwork errors, and supplier fraud added up to $34.5 billion. This was 1.41 percent of retail sales. Employee theft made up 43.9% of the total loss. And shoplifting made up 35.7%.

Employee theft continues to cause more losses than shoplifting. According to the Hayes survey, the money recovered from employee theft continues to be less than for shoplifting.

Here's how much money was recovered from retail theft:

  • $50 million in 2012 and $32 million in 2020 from employees
  • $138 million in 2012 and $49 million in 2020 from shoplifters

Occupational Fraud

Employees can also cost their workplaces huge sums of money through fraud and embezzlement. In 2012, ACFE found that the typical fraud cost $140,000. In the 2022 report, the average loss per case was $1.7 million.

Owners and executives only commit 23% of the fraud. However, they cost a company the most.

Here's how losses from different employees compare:

In 2012 the projected global fraud loss was $3.5 trillion. Nowadays, that number is $4.7 trillion.

Cryptocurrency is also prevalent in employee fraud. 8% of fraud cases involved bribery according to ACFE 2022.

Cryptocurrency was mostly used for:

  • Bribery
  • Kickback payments
  • Conversion of misappropriated assets

What Can Employers Do to Prevent Theft?

There are plenty of ways to prevent employee theft and minimize damages. Here are some of the things you can do.

Main Steps
The first step is to conduct a background check before hiring someone. Especially for new hires who have financial responsibilities.

In retail, security cameras and cash drawer controls are helpful.

Organizations may benefit from partial website blocking or surveillance tools. However, that can quickly backfire. The less morale-deflating option is to focus on output. Instead of monitoring every employee's keystroke.

Fraud Prevention
As far as fraud is concerned, ACFE notes that training can help immensely. Hotlines are a big factor as well. According to their report, organizations with hotlines suffer half the fraud losses.

Bottom Line

Employee theft is something most business owners have to deal with. However, that shouldn't stop you from trusting your employees. The best thing is to take preventative measures.

After all, you don't want to sacrifice productivity gains because of theft fears and lack of trust. Workers who are treated well may repay their employers with honesty.

Still, it's probably best for any employer to keep an eye on the supply cabinet.

References

Livia Gershon is a contributing writer at CreditDonkey, a credit card comparison and reviews website. Write to Livia Gershon at livia@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

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