From stealing time to committing remote fraud, these are some of the surprising ways employee theft can occur in your place of business. Workers may also abuse employee discounts.
Such acts contribute to the growing problem of employee or internal theft, which costs businesses about $50 billion yearly, as data from Exploding Topics shows.
With such shocking figures, it's time you familiarize yourself with the crafty, less conspicuous ways that employees commit theft, as this can help you enforce effective internal theft prevention strategies to protect your business from significant losses.
What Is Employee Theft?
Employee theft refers to specific intentional actions of employees that cause their employer financial losses. It involves the unauthorized taking, embezzlement, or misuse of a company's:
- Money
- Assets
- Property
Employees commit the above for their personal gain. Inventory theft and cash skimming are among the most well-known tactics, while others, such as "stealing" time, are less obvious yet prevalent.
What Should Employers Do With Employees Caught Stealing?
Investigate right away. Restrict access to the area, or, in the case of digital theft, the impacted files and systems. Then, collect proof, such as CCTV footage and witness statements, to confirm the allegation.
As the business owner, you must remain objective to ensure the accused employee undergoes a fair and impartial investigation. Never make any accusations without concrete proof.
Follow your company's disciplinary procedure, including informing the accused employee of the allegation and holding a formal disciplinary hearing. Even if they turn out to be guilty, they have the right to present their side of the story.
If all the evidence points to the employee being guilty, proceed with the disciplinary action as outlined in their signed employment contract.
A formal warning may be appropriate if there are mitigating circumstances and the theft is minor. An example is if the employee has a long, spotless service record and is under severe financial pressure.
If the theft is significant, repetitive, or has been going on for a long time, immediate dismissal without notice may be best.
What Are Surprising Ways Employees Steal From Their Employers?
A survey conducted by Business.com found that a staggering 67% of employees have committed at least one form of theft at their current place of employment. Four in ten even admitted to having stolen from their employer in more than just one way.
Here are some ways employees commit theft that go beyond stealing inventory or physically pocketing money.
Time Theft
Time theft occurs when employees accept payment for "clocked-in" time even though they haven't done any actual work.
False recording is one of the most common tactics to commit this type of employee theft. It can involve putting in inaccurate time records, such as by falsifying time ins and timeouts that make it seem they've clocked in earlier and clocked out later.
Employees can also steal time from their employers through buddy punching, in which they'll ask a work "buddy" to clock them in if they're late or clock them in and out if they're absent.
Using paid company time for personal reasons is another way employees commit time theft. It can take many forms, including:
- Texting
- Taking and making phone calls
- Creating and responding to email messages
- Shopping online or browsing the web
As long as the above activities are personal and don't have to do with work, doing them on company time can constitute employee time theft.
Remote Fraud
Remote employee fraud can occur when remote workers manipulate work hours. They may do so to make it seem that they've worked more hours or have completed more tasks than they've actually done.
Remote employees may also use software or physical devices that enable their computers to remain active by simulating mouse movement or keyboard strokes, giving the impression they're working even though they're away from the keyboard.
Abuse of Employee Discounts
Abusing employee benefits, such as discounts or free services available only to employees, can also be a form of employee theft. Instead of using it only for themselves, workers may take advantage of these programs and use them for family and friends.
How to Prevent or Minimize Time Theft
You can prevent or minimize time theft by investing in an advanced time tracking and employee monitoring system, such as a biometric swipe card time clock. With this, employees would need to scan their unique fingerprints to clock in and out, putting a stop to buddy punching.
You should also roll out policies regarding time and productivity tracking apps to minimize incidents of using company time for personal reasons. Such programs can track employees who do non-work stuff on their computers through screen captures, keystrokes, and mouse movements.
Frequently Asked Questions
How Can You Tell if a Worker Is Committing Employee Theft?
If inventory and money go missing during a specific employee's shift, and it happens more than once, take it as a red flag of potential theft. In this case, look at written records to catch any discrepancies, such as inconsistent entries and missing receipts or invoices.
Review CCTV footage, too. It can serve as concrete evidence if the videos capture the actual incident of thievery.
Behavioral changes in the employee suspected of committing theft can also signal guilt. If they're defensive or secretive, they may be doing something worthy of feeling guilty.
Likewise, be on the lookout for employees who suddenly have the ability to afford things they couldn't before. If their spending doesn't match their salary and they have no other source of income, it could be a sign of employee wrongdoing.
Can Employees Get Fired for Stealing?
Yes, it's usually within the right of employers to fire employees caught and convicted of stealing. They may even sue the accused workers, particularly if the crime is egregious, provided they have adequate, solid evidence (e.g., CCTV footage, documents, and witness testimonies).
Don't Let Employee Theft Destroy Your Business
Employee theft can cause significant financial losses to your company, whether it's in the form of stealing time and inventory, remote worker fraud, or embezzlement. Before this happens, implement policies and invest in innovative employee monitoring and time tracking technologies.
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