Study Shows Employee Theft Primarily Used To Improve Life Style

Online, January 10, 2015 (Newswire.com) -

A recent study of 314 small businesses on employee theft indicates that most employees caught stealing are fired with no attempt made by the employer to press criminal charges and obtain restitution for their business loses. In fact, 64 % of small businesses experienced employee theft but only 16% of these thefts were reported to the police.

Many owners considered the theft a victimless crime. Others consulted with their attorneys who advised against prosecution on a cost basis. Legal fees can be very high and the thief, now unemployed, often lacks any ability to repay the debt.

Personal ties also play a major role in the lack of action. The owner often knows the employee and his family and doesn’t want to cause the family additional trouble. Many owners also do not trust the police to do a competent job of handling business theft.

Finally, some owners are embarrassed and don’t want the theft to become public knowledge. The Employee is then free to find a new employer to steal from since he will not obtain a criminal record for his illegal behavior.

Most thefts are done over time. On average the employee was stealing for 16 months before they were caught. The average amount stolen was $20,000. They often had a long and personal relationship with the owners and were occasionally relatives. In general, it seemed as if the more an Employee was trusted by the owners, they more was stolen.

Theft was almost always uncovered by accident. This should come as no surprise since most small businesses have no system of checking employee activity to guard against theft. We have found that even simple procedures such as occasionally rotating jobs go a long way toward controlling theft.

Owners tended to be sympathetic, assuming the employee needed the money for emergencies. In fact, there were very few emergency situations. The money was used to purchase lifestyle improvement items at the company expense. Most thieves cannot explain where they spent the money they stole.

In most small companies, employees are not screened. In some small companies, only employees handling cash are screened. The difference is interesting, employees handling cash are less likely (only2%) to steal company money.

This is no coincidence. Screening can significantly reduce employee theft. Criminal history, credit history and employment history will uncover some of the causes of employee theft and enable you to make better decisions on who to hire.

http://smallbusiness.foxbusiness.com/legal-hr/2014/02/20/employee-theft-why-most-small-businesses-dont-report-it/

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