Employee theft robs US businesses of $50B annually
- Employee theft costs U.S. businesses $50 billion a year, CNBC reports, citing data from Statistic Brain. Small businesses are especially at risk for employee theft, says CNBC, because it often goes undetected.
- CNBC also reported on a new study by Hiscox, a global specialist insurer, which found that American companies lost on average $1.13 million to employee theft in 2016. Hardest hit were small and midsize companies, whose median loss last year was $289,864. These businesses made up 68% of employee-theft cases.
- Based on the Hiscox study, the top five costliest types of employee theft are vendor fraud, funds theft (also the most common form of embezzlement), check fraud, payroll fraud and credit card fraud. Doug Karpp, Hiscox's crime and fidelity product head, told CNBC that workers who embezzle are often trusted team members.
Few employers worry about employee theft or embezzlement, according to the CNBC/SurveyMonkey Small Business Survey. Only 1% think about the possibility of embezzlement by workers.
A report by the cybersecurity firm Dtex Systems shows an overwhelming percentage of employers (95%) have employees who try to break through their security and Internet restrictions, which can lead to unauthorized access to employees' personal and financial data. Willis Towers Watson found that employees are responsible for 66% of cyber breaches, which also can lead to monetary theft.
Employers have an ethical responsibility to build trusting work environments in which employees can thrive and be productive. But the possibility of theft and other forms of misconduct among staff is real, and employers must lower their risks for losses without sacrificing trust. HR can take the lead in cultivating a workplace that values and encourages ethical and honest conduct from everyone in an organization. This commitment won't prevent all incidences of employee theft, but it could reduce employers' risks against losses.