It is said that in the UK, employee theft costs businesses more than £190 million a year.
For months leading to the festive period, many companies have been busy increasing their stocks to meet higher demands expected at the end of the year. Now the stocks are in and companies are under pressure to deliver them the customers on time. During this intensely busy holiday period, dishonest employees can take advantage of the situation and target high-value items as well as easy-to-conceal items.
It must be said that theft comes in many forms. Not all employees who steal are after products, so it is not just retailers with stocked goods are at risk. Every company is vulnerable, regardless of its size and industry.
When everyone is busy, the temptation to embezzle is a real threat to every business. For instance, employees may help themselves to some cash kept in the store or to swindle the company with a string of fake invoices.
Data theft is also a concern. When all team members are in a joyous festive mood, they may let the guard down, leading to error and negligence, giving opportunists a chance to illegally access data and sell them in the black market.
Why do employees steal?
There are usually several reasons behind each theft, including but not limited to:
- Greed – the desire to have more or to make a quick person gain.
- Financial pressure – festivities are expensive, and they often lead to overspending and debt. Employees may steal money to ease the financial pressure they face.
- Feeling injustice or undervalued – disgruntled employees are more likely to commit crimes against the company they work for.
- Entitlement – employees who have worked with certain supplies for an extended period may feel they are entitled to the property.
- Following others – employees see other team members steal and believe it is acceptable to follow suit.
- It is easy – busy festive period gives opportunists a good window of opportunity to commit crimes.
- Incorrect perception – employees incorrectly believe that taking a few things here and there does not matter.
- Addiction – employees who have a gambling or drug addiction will always in need of extra cash.
In the article How to conduct an employee theft investigation, we highlight the seven steps our corporate investigators will carry out when we are asked by companies to conduct an investigation into suspicious of theft. The steps are:
- Be discreet – do not confront any suspects, instead discuss the matter with key stakeholders (particularly your HR department and solicitors) and independent corporate investigators.
- Establish a plan on how to deal with the situation.
- Avoid touching the data if it is embezzlement or data theft. Leave the investigation process to digital fraud experts or accounting fraud investigators.
- Allow independent investigators to gather and preserve the necessary evidence, so they can be admissible in court.
- Trace the assets if it involves a large sum of money or valuable assets like intellectual property.
- Decide if you want to take a disciplinary action or a criminal prosecution against the perpetrators.
- Evaluate your process and procedure to prevent any future occurrence.
How can companies protect themselves against employee theft?
There are no fool-proof methods that can eradicate employee theft completely, but there are ways which can help to reduce employee theft and greatly improve your loss prevention and they are:
Annual background checks
Many companies understand the importance of background screening for new hires, but they do not continue to check and verify employees on a yearly basis, especially those who have access to data and/or payment accounts. Having your employees go through a thorough background checks process every year is a particularly effective deterrent.
Installing video surveillance and increased patrols of security personnel are likely to have an impact.
Make use of technology
Using a good inventory management system, implementing rules to restrict inventory access, and installing accurate tracking software are some of the techniques companies can use to minimise theft.
Stay in control
Being busy does not mean you need to let the guard down. Stay in control of cash, perform regular audits and track performances to spot irregular patterns can help to deter potential opportunists.
More often than not, it is sharp-eyed employees who spot misconduct first, so make it a corporate culture that anyone who helps to combat employee theft and bring accountability to the perpetrators will be hugely rewarded.
Call Blackhawk Intelligence if employee theft is hurting your bottom line
Combating employee theft can be a challenge if it involves embezzlement or fraudulent disbursements, as the perpetrators are likely to cover their track by falsifying records. In such circumstances, the best solution is to hire an independent, trusted team of digital fraud experts or accounting fraud investigators to assist with the investigation.
To find out more about how you can protect your company from employee theft year-round, give us a call on +44 (0)20 8108 9317 to arrange a meeting.
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This post is intended to provide information of general interest about current business issues. It should not replace professional advice tailored to your specific circumstances.