Employee theft is unfortunately common among businesses. It can range from taking away extra snacks from the office pantry to full-on by your regular office glutton to large-scale fraud from Wall Street tycoons.
In general terms, employee theft is the unauthorized taking, transfer, or use of the property of your organization. Employee theft is at its peak, as about 75% of employees have admitted to stealing from their employer at least once.
Currently, 95% of workplaces face huge employee theft issues. If you’re managing an office, you should know the following stats.
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- Employees steal around $50 billion from US businesses annually.
- 75% of employees have stolen from their company at least once.
- More than 33% of bankruptcies are due to employee theft.
- Men are behind in 72% of occupational fraud cases.
- The average age of offenders who commit employee theft is 48.
- 42% of the cases come to light thanks to a tip.
- More than half of all tips come from employees.
- 3 out of 10 times, the perpetrator has been stealing for years before they get caught.
- 8% of fraud cases involve the use of cryptocurrency.
- Organizations lose 5% of revenue to fraud annually.
- Fraud cases cost about $8,300 monthly and last 12 months before detection.
Overview on Employee Theft Numbers
Every US adult tells an average of 1 to 2 lies daily. With our expanding reliance on digital tools, fraud is on the rise. However, employees don’t just steal or commit fraud because they can.
Renowned criminologist Donal Cressey theorized that individuals tend to commit fraud based on three factors:
- Pressure
- Opportunity
- Rationalization
The fraud triangle developed by Donald R. Cressy in 1953 is still relevant and useful to date. Stealth uses a more robust and refined fraud triangle. pic.twitter.com/lcUCN4gZSP
— Stealth Africa (@StealthLLP) February 14, 2019
There are many reasons why bottom-feeder employees and even CEOs steal or commit fraud. Let’s check out the latest stats!
1. 75% of people have stolen from their company at least once.
(Finances Online)
Investing in people is perhaps one of the most important decisions you’ll have to make as a business owner. Most of the time, you can only hope you’ve made the right choice.
About 75% of employees have stolen from their employer at least once, and over 37.5% have reported stealing at least twice.
There are many ways for companies to deter stealing and fraud. They should prioritize establishing a culture of honesty and integrity and implement strong internal control measures.
2. In ⅓ of the cases, the offenders worked with the company’s accounting or finance.
(Embroker)
Isn’t that neat? The people you trust with your money are the ones who steal from you.
Employee theft statistics also show that more than half of people would steal from their businesses if they knew they wouldn’t be caught.
Deterring fraud from the people who handle your books isn’t easy. However, companies can remedy this by closely monitoring financial transactions, conducting audits regularly, and ensuring sufficient insurance coverage.
3. Employees steal around $50 billion from US businesses annually.
(Exploding Topics)
Businesses lose roughly 5% of their revenue due to workers stealing. Workers can steal money, falsify travel or reimbursement documents or steal physical property.
Employee theft places a heavy toll on US businesses, and the most brutal hit are small businesses, often unaware of internal perpetrators.
Theft is a business risk, as employers can incur dire financial losses. Those who are caught stealing can also face serious legal consequences. They may also be penalized for gross misconduct, demotion, and even termination.
4. In 3 out of the 10 employee theft cases, the offender has been stealing for years.
(CompareCamp)
Most employees have been stealing for years. Many continue with it in any organization or business enterprise they find themselves in, as it has become part and parcel of them.
On average, it takes five years before a thieving employee is caught. It takes a long time to catch thieving employees since some steal such small amounts that it doesn’t even raise a red flag. Some don’t even realize they’ve committed theft at all.
5. Over 33% of bankruptcies are due to employee theft.
(Embroker)
A third of all business bankruptcies in the United States are due to employee theft. Overall, this amounts to $50 billion annually.
Some of the biggest bankruptcies are due to massive fraud by their executives. In 2020, Germany-based Wirecard filed for insolvency. However, a fraud investigation showed that $2.1 billion was missing from the company’s books.
As the biggest corporate fraud case in German history, its CEO and former top executives face multiple years in prison. Investors face little hope of ever recovering their money.
Lessons from #Wirecard scandal weren’t learned ⬇️ https://t.co/Thr9jhU4ub
— Andreas Fulda 🇺🇦 🇹🇼 (@AMFChina) April 25, 2022
Employee Theft Demographics
Fraud can happen anytime and be committed by anyone. However, some are more likely to commit them than others. From a corporate perspective, employee theft is typically done for personal gain or a desire to mislead shareholders and investors.
In the past few years, government agencies, forensic accountants, and external auditors launched a massive effort to combat theft and fraud.
However, many fraud and theft cases still get through intense scrutiny by these institutions. Let’s check out the stats!
6. Men are behind in 72% of occupational fraud cases.
(Embroker)
Men are more likely to commit fraud. Specifically, well-educated men in their 30s to 40s are primary perpetrators of white-collar crimes.
A quick look at some of the biggest financial scandals worldwide shows that men are allegedly at the forefront of financial fraud. Some of the most notorious cases are:
- Sam Bankman-Fried of FTX
- Bernie Madoff of Bernard L. Madoff Investment Securities LLC
- Martin Shkreli of Turing Pharmaceuticals
It’s unclear why these are the most common demographics for fraud. However, it may concern their financial positions, network, and overall company influence.
7. The average age of those who steal from their companies is 48.
(Embroker)
Employee theft statistics show that 34% of millennials justify stealing from their employers. It’s logical to assume they will likely be the number one offenders too. However, studies show that the average age of your company thief is 48.
O top of that, they are usually middle-aged people belonging to middle-class families. Some admit financial gains as their motive.
About 48% of Americans in that same age group admit they won’t be able to “survive” in retirement because of a lack of funds. Other reasons could include:
- Fear of loss of employment or status
- Gambling addiction
- Health issues
- Crippling debt
Most perpetrators also act alone. However, others work together to circumvent systems in place mean to deter fraud within companies.
| 👍 Helpful Articles While this may seem shocking, millennials are also 25% more likely to report frauds and scams, at least compared to those 40 and above. Unfortunately, scams abound, especially in the golden age of the internet. Protect yourself from fraudulent transactions by reading through some of our helpful articles. Phishing by the Numbers 5 Line Fraud Baits You Should Know Offerup Scams To Protect Yourself From |
8. Only 4% of offenders have a previous criminal record.
(JW Surety Bonds, Stonebridge)
This is another surprising number that makes it tougher to predict who would steal from you and why, but also one of the reasons why you must investigate someone before hiring them.
Roughly 83% of people who commit fraud have never been terminated from a job or punished before committing fraud. This occurrence may likely be because cases are rarely reported to law enforcement. Others may also enter into confidential settlement agreements.
Conducting thorough background checks on applicants before hiring can’t be over-emphasized, as it helps mitigate the occurrence of these nefarious activities.
| ✅ Pro Tip If you suspect someone is committing fraud, you can quickly investigate them using top-reviewed background checkers. While you legally can’t use these to discriminate against employees, especially during the hiring process, this can give you an idea of how this person has conducted themselves in the past. |
9. Both at a 34% rate, a high school diploma and a bachelor’s degree holder are prone to commit workplace fraud.
(CompareCamp)
High school and university graduates are included in the list of employee theft demography. The steady rise in employee theft statistics within all age brackets makes it paramount to put all the necessary measures to checkmate these criminal acts.
Employee Theft Type
There are many types of theft employees can commit. Cases include, but are not limited to:
- Skimming: Stealing money before someone logs them in.
- Embezzling: Stealing data/money/info they were authorized to access.
- Data theft: Stealing sensitive information.
- Time theft: Wasting time during work hours. Examples include taking extra long lunch breaks or doing the laundry during work hours when working from home.
- Intellectual theft: Stealing company secrets and ideas.
- Inventory theft: Yes, bringing a pen home from the office counts.
Keeping a keen eye on employees showing signs of fraud can help deter and catch fraud cases and identify potential risks.
10. Financial statement fraud leads to $39,800 in monthly losses.
(ACFE & Zippia, My Educator)
Workplace theft statistics show that skimming costs a company $2,900 monthly, on average. The median monthly losses for check and payment tampering sit at $4,600. Corruption follows at $11,100, noncash at $6,000, and billing at $4,200.
Motivations for financial statement fraud vary on a case-to-case basis. However, a common theme in many fraud and employee theft cases are:
- Attempts to improve reported financial data to support high stock prices
- Support for a bond or stock offering
- Increasing a company’s stock price
Many companies issuing fraudulent financial statements involve having executives who own considerable amounts of stocks or stock options. If stock prices were to go down, their personal net worth would significantly decrease.
Furthermore, if they want more people to invest, they must keep their financial statements promising.
11. Nearly half of all occupational frauds came from these 4 departments:
(ACFE)
In many ways, the workplace is a den of thieves. Taking home a paperclip or a stapler may not sound like a crime, but technically it is. However, some departments are just more likely to steal compared to others.
The Association of Certified Fraud Examiners (ACFE) cites the following departments as the most sticky-fingered groups within companies:
- Operations 15%
- Accounting 12%
- Executive/upper management 11%
- Sales 11%
Nothing too surprising here. The easiest way to hide money before being accounted for is by logging them in beforehand.
12. 21% of those working in tech companies steal from their employers.
(JW Surety Bonds)
When asked why they stole, most said they could escape it. Most of these cases involve intellectual theft.
This theft involves stealing secrets, ideas, creative works, expressions, or inventions from an individual or organization. People think stealing ideas or creativity isn’t that big of a deal. Yearly, 34% of businesses worldwide suffer from insider threats, a type of intellectual theft.
However, at the bottom line, intellectual theft undermines a company’s economic growth and stifles innovation.
Unsurprisingly, data breach accidents like hacking usually involve IT department personnel since they can access sensitive information.
13. 28% of retail inventory losses in the US are due to employee theft.
(JW Surety Bonds)
These retail theft statistics are far from optimistic. Employees steal clothes, food, cosmetics, tech gadgets, and more.
In America, employee theft accounts for 43% of lost revenue. It costs retailers nearly half of their reported lost revenue.
Certain stores tend to experience employee theft more often than others. Discount stores report higher employee theft numbers than supermarkets or home improvement stores.
Employee theft is a grave crime, and while the consequences of employee theft are severe, these people do not seem discouraged.
14. 52% of people take office supplies like pens or paper.
(CompareCamp)
Even using the printer for personal reasons counts as employee theft.
Scissors, pens, markers, notebooks, and sticky notes disappear regularly. They continue with this as they assure themselves that the supply is replenished when due. This act has led to extra millions of dollars in expenses annually.
| 🎉 Not-So-Fun Fact: A Texas man was caught after stealing fajitas for nine years. What started as a side hustle for the defendant, Gilberto Escamilla, snowballed into a retail value of $1.2 million of meat. Escamilla, who worked at Cameron County Juvenile Detention Center, was sentenced to fifty years for first-degree felony. His sentence was also harsher than regular employee theft because theft by a public servant is a more egregious crime in Texas. |
Employee Theft Prevention
Many theft cases may have already been happening for years. However, there are some behavioral red flags that companies can look out for in possible fraud cases, such as:
- Luxurious living
- Financial issues
- Unusually close association with a client, vendor, or contractor
- Control issues and micromanagement
- Divorce or family issues
Before giving you the know-how, here are a few statistics on employee theft prevention worth sharing of.
Read on to find out!
15. Tips lead to uncovering 42% of all employee theft cases.
(ACFE)
Half of the time, workplace theft charges are resolved by conscientious employees. Another 22% of tips come from customers.
Employees are less likely to steal from you if you have a good relationship with them. If it happens, the loyal ones will let you know.
16. Internal audits detect 16% of employee fraud issues.
(ACFE)
Here’s another recommendation: keep up to date with your internal audits. Don’t warn anyone about them. Check bank statements, inventory, and cameras.
Internal auditors can detect fraud by conducting audits, reviewing transactions, and analyzing data. They can help businesses to prevent further fraud and minimize the financial impact of any incidents by identifying suspicious activity and investigating potential fraud cases.
17. Management reviews solve 12% of cases.
(ACFE)
People are less likely to steal if a boss is involved in the company dynamic. One-on-one meetings are an excellent way to see if there are any issues. Reviews are also very beneficial.
Make sure your company has clear policies. Protect sensitive data and don’t give many people access to it. Try to set a good example and be as present as possible. As earlier discussed, an employee wouldn’t commit a crime if they knew they’d get caught.
Good employee monitoring software will make the whole job a lot easier.
Wrap-Up
Workplace theft is no joke. It can lead to dire consequences, both financially and legally. Using the company printer is, in hindsight, harmless. However, most other issues can lead to money losses or even bankruptcies.
The good news is that it can be avoided if employers and workers practice honesty and integrity.
FAQs
How often do employees steal?
75% of employees have stolen at least once, and 95% of companies have suffered from employee theft.
How much do companies lose from employee theft?
US businesses lose around $50 billion annually. Some even go bankrupt because of it. While no bulletproof method exists to avoid this, you can always get cameras, install proper software, and be careful with who you hire.
Why do employees steal from their employers?
That remains a mystery. Some people need more money or resources. Some might do it for the thrill.
How does employee theft affect other employees?
If you don’t catch one thief, you can expect more thieves. Employee theft can be contagious within the workplace and lower productivity levels.
Sources
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With a master's degree in telecommunications and over 15 years of working experience in telecommunications, networking, and online security, he deeply understands cybersecurity's value and importance. Max leverages his vast experience and knowledge to research the latest cyber threats, scams, malware, and viruses in-depth.