The High Costs of Employee Theft
The High Cost of Employee Theft: Is it Happening to You?

It can be a shock to discover that theft is occurring in your workplace. Each of your staff may have shone at recruitment, with no visible trust issues apparent. So how can we reconcile our valuable personnel with the fact that theft regularly occurs in the workplace? What did we miss? Let’s take a look at the typical way in which workplace theft occurs, plus some startling statistics about the costs to industry.

The many ways to thieve

On shop floors, at workstations and in warehouses, Australians are stealing an accumulated $2 billion from retail employers alone each year, according to the Australian Retailers Association. Cold hard cash and inventory are certainly among the most popular ways for staff to steal from the workplace. In fact, staff members tend to pilfer from workplaces at approximately the same rate as customers. And for ordinary customers, we enjoy a 3% added cost to our purchases, courtesy of employee theft. But there are other, less obvious methods by which staff can fatten their pay packets. False invoices, inflated petty cash claims, sneaky discounts to friends, personal activities in company time, irregular credit transactions, undeclared client gifts, falsified documents and inaccurate time sheet entries can all work to strip away from the employer’s bottom line. 

Who and why?
We would perhaps not be surprised to learn that a lower-paid cashier has had a hand in the till to help pay their rent or groceries. Yet such generalisations don’t necessarily hold in the context of the ‘average’ workplace thief. In fact, the staff who tend to steal the most from bosses are those in the higher-paid and higher-access executive roles. With access to financial resources such as company credit cards, cab vouchers and expense accounts, white collar managers unfortunately take the gong for the greatest theft in the workforce. And for those personnel involved in daily dealing with accounts, revenue and general finance, the temptation to thieve can also be extremely evident. It can be a simple case of opportunity meets temptation for those workers given the greatest trust.
When the chips are down
It is perhaps not surprising that attempts by workers to steal tend to increase during times of economic downturn; costs climb and paying bills can become harder each day. And it is also at this time that employers are actually more likely to take a zero-tolerance approach to fraud and theft. It is important, however, for workplaces to take a measured stance on workplace theft reduction. This includes not making any hasty decisions once a thief is detected.
Tips for employers
If an employee is suspected of theft, it is important for management to carry out an objective and professional investigation. Rather than jump to any conclusions, be sure to implement a process that adheres to the principles of procedural fairness. It is also important to regularly check and update your policies and procedures around fraud and theft. As part of this, ensure that the employment contract you use at recruitment has strong and clear explanations of the types of misdemeanour that will not be tolerated. Think also about your staff morale, including strategies for keeping employees content. There is a direct link between unhappy workplaces and the amount of theft engaged in by workers. Also think carefully about the right steps to take once theft is uncovered. It might be tempting to make an example of the employee who slips a stapler into his backpack, coming down swiftly and hard. Yet instant dismissal in such a case – particularly if the worker’s record is otherwise unblemished – might lead to unfortunate legal repercussions for the business. Work out if this is something with sufficient gravity to warrant calling the police, or if internal measures might suffice.
Keep it clear
Humans are of course a rather self-serving lot. Petty thievery might unfortunately be here to stay. Yet employers can take assertive measures to reduce the likelihood of workplace theft. First, develop and regularly check or policies and processes related to staff fraud and theft. Secondly, take measured action in relation to any allegations, and seek advice if you are uncertain about the best response. And finally – aim for a workplace with high morale and clear communication, to help reduce the temptation for wrongdoing among your staff.

Content retrieved from: http://www.wiseworkplace.com.au/_blog/WISE_Blog/post/the-high-cost-of-employee-theft-is-it-happening-to-you/.