Experience Files

Employee theft is a pervasive and serious issue that can manifest in various forms, some common and others less obvious. As a business owner, understanding these different avenues of theft is crucial for protecting your assets and your bottom line.

Here are common ways employee theft can occur:

• Theft of Assets/Inventory: This is more than just an employee "borrowing" a few fans and a dehumidifier for a home project or side work. It can include swiping a box of gloves, a few Tyvek suits, or even larger equipment.

• Theft of Cash: This can take several forms, such as an employee misrepresenting the actual cash payment received from a client (e.g., reporting $100 when $150 was paid). It also covers employees with access to petty cash taking money when no one is looking, or even stealing client possessions or cash, like a handbag or money from a dresser.

• Theft of Services: A subtler form of theft, this occurs when an employee reports a project as "lost" to the company, then performs the work directly for the client on nights and weekends, essentially stealing the company's potential revenue.

• Theft of Payroll: This typically involves an employee falsifying their time card to misrepresent hours worked, leading to a larger paycheck than deserved.

• Theft of Disbursements: This category includes instances like a marketing person inflating mileage reports for a larger reimbursement, an employee submitting a personal receipt as a project expense, or even misrepresenting project costs or revenue to artificially inflate profit margins and qualify for a larger bonus.

• Theft of Data: In today's digital age, this is a growing concern. It can involve an employee stealing client contact lists to take to a new company or, more dangerously, stealing sensitive client data like credit card or Social Security numbers for identity theft.

Alarmingly, the average employee theft goes undetected for 14 to 16 months. What's more, 85% of employees who commit theft exhibit at least one or more red flags before their actions are confirmed.