why does employee theft occur

For example, a camera at your back door may help ensure employees don’t steal items being delivered whereas using purchase orders can ensure that each purchase is “approved” in advance. Others may consider it no big deal to make a few photocopies or borrow a sticky note pad or tape dispenser from the supply room unless you tell them that’s prohibited. Office theft is not limited to material assets. Employees, like all US citizens, are presumed innocent until proven guilty. According to the Association of Certified Fraud Examiners (ACFE), companies lose 5% of their revenues each year to employee fraud. Other forms of cash and payment theft might include: In fact, embezzlement and check fraud are the most costly of all employee theft. Laura Handrick specializes in the full cycle of human resource topics from recruiting to talent management. Explainable AI: A Must for Nuclear Nonproliferation, National Security, abode launches standalone HD security camera with 24/7 recording, Guardian Zone now available in the Microsoft Azure marketplace, Nortek Control unveils the new 2GIG EDGE Security and Automation Panel, HID Global named a leader in 2021 Gartner report for second straight year, Taking receipt of stock (in particular, highly desirable items), Checking staff bags when they leave the business premises, Cash-up procedures during trade and the end of day, The exact time the business must be open and ready to trade, The exact time the business can close the doors to customers at the end of day, The use of a sign on/off book or punch card system and the implications for failing to do so, Rotation of staff (minimise the frequency that the same staff work together), Taking receipt of stock from suppliers (as above), Holiday rosters (often staff stealing will try to put off taking holidays). It can happen in the form of employees stealing business supplies or even faking time-sheets. Employee theft is responsible for 33% of all business bankruptcies. If you’ve already sent the employee home, you can follow up with a termination letter or email. You must be logged in to comment. As many as 72% of departing employees admit to taking company data and 70% of intellectual property theft occurs within the 90 days before an employee’s resignation announcement. Watch for missing inventory and a sudden exodus of established customers. An employee pockets the money and never rings up … Other employees often ignore the theft and don’t do anything about it. You might also consider installing systems that allow you to monitor what’s happening on your business computers, network or website. This is especially important if your workforce is new to the job market, such as summer high school students. Rather, theft can occur because of negligence or lack of proper procedure. Knowing why time theft occurs and taking preventative action against it helps organizations detect its presence and take immediate preventative action against it. Implement internal controls to safeguard your assets. Below are examples of other types of employee theft a business may encounter. For example, let’s say that employees punch in before their scheduled shift, or worse have a buddy punch in for them when they’re not yet on site. Your business is vulnerable every time employees have the opportunity to handle cash. Use these tips to protect your firm’s assets from theft. That’s true for payroll as well—the person who approves employee time cards shouldn’t be the same person running payroll. Employee Theft . Why don’t traditional tactics work? To ensure your theft policy works, you need to enforce it. Require your bookkeeper to take a vacation: Embezzlement and other types of fraud require a constant paper trail to go undetected. Further, it’s a best practice to prevent any person who writes company checks to be allowed to manage business bank reconciliation. 5 Most Common Ways Employee Theft Occurs. Need is one reason individuals steal from their employers, and while a need might be based on some particular hardship or change in income, it could … It may help to work with a neutral party with a fresh perspective to find the red flags. How Does Identity Theft Occur. Unscrupulous employees could steal a customer’s credit card numbers and make purchases online. Other employees often ignore the theft … Then, follow up on their concerns by enforcing your policy. In fact, accusing an employee of theft is risky as it assumes guilt. She holds SHRM certification as a Senior Professional in Human Resources (SPHR), a Master's in Educational Technology from San Diego State, and is certified as an International Franchise Executive through the IFA. If employees know you don’t enforce your policy, they’ll be emboldened to steal or to keep stealing. You may have five employees who decide to start their own roster where four will come in and cover for the one staying at home and they will each take it in turns to have a day off. Other examples of employee theft of services: Stealing cash or money is what many employers think of when they imagine employee theft, and it’s certainly common, especially for businesses that don’t have strong POS systems like Lightspeed. Employee theft is rising, but that does not mean that you are completely helpless against it. TIPS TO REDUCE EMPLOYEE THEFT. While this number is scary, the amount lost to fraud has decreased from a record high of 23 billion dollars in 2010. The opportunity to commit fraud is typically addressed through internal controls—if the proper checks and balances exist, it is more difficult (though still not impossible) to defraud an organization. That means in addition to monitoring existing employees, which we’ll cover below, you’ve got to do background checks on your new hires and ensure they’re the type of people you can trust. Select the newsletters you’re interested in below. Therefore, if your policy states that you will prosecute employees for theft, do so. Automated systems can reduce some loss, but not all. Let’s face it, we increasingly live our lives online. How does data theft occur? Internal Mail Theft The overwhelming majority of Postal Service employees work conscientiously to move the nation’s mail to its proper destination. In some cases, former employees are responsible for data theft. Openly accusing the employee can make the employer look unprofessional to the rest of the team and lead to second-hand embarrassment and awkwardness. Make clear that any theft violates company policy and that stealing will cause managers to question the employee's honesty and integrity and could jeopardize the employee… We’re not talking about stealing a few pens from the stationery cupboard here. It would be better to state that he or she is being terminated for “violating company policy.” Here’s additional insight from an attorney: “I would always make sure to provide the reason of termination in writing if I spot anything that’s off. Coverage that would protect a business if employee theft occurs: There are two types of bonds that would help protect your business in the case of fraud, embezzlement or theft of a customer's property. On average, it takes 18 months for an employer to catch an employee who is stealing. Fidelity Bonds: Fidelity Bonds provide coverage against loss from employee theft Don’t leave cash on counters and desktops. Traditional data loss prevention tactics do not work. The following includes some of the ways identity theft may occur: Steal wallets or purses in order to obtain identification, credit and bank cards; Dig through mail and trash in search of bank and credit card statements, pre-approved credit card offers, tax information and … Idea theft is most common in professional or high-tech environments and can be addressed by having employees and contractors sign a non-compete or nondisclosure agreement upon hire. Shoplifting is most likely to happen when sales staff are occupied or distracted.