Employee theft is one of the most pressing problems an organization has to handle. Not only does the activity affect the department where the misdemeanor happened, but it affects the morale and profitability of the entire organization.
Employee theft is particularly common in the food industry. It’s not uncommon for wait staff or cooks to take home food from restaurant without paying. Not that I can blame them. I admit to taking home some leftover chips, salsa, and dips myself as a waiter back in college a few times.
My direct manager at this restaurant was even worse. It was discovered that the restaurant manager was pocketing tips and cash from the register at work. She managed the store for years before this was discovered by the owners.
Employee theft can involve stealing merchandise, time, as well as money. It’s estimated that 3 out of 4 employees confess to stealing from their employers at least once. Fraud cases involving employees usually last for 2 years before being discovered. The financial loss companies incur from employee theft each year depends on the size of the organization and the products they sell.
While a waiter taking a free burger from time to time isn’t going to sink your business. It can cut into the bottom line and profitability of your establishment if too many employees do it. If you want to learn more about employee theft numbers, keep reading to learn the facts about this common employee behavior that the FBI say 75% of all employees have done.
Employee Theft Statistics
Businesses experiencing employee theft occurring for more than 10 years take an average loss of about $5.4 million dollars.
52% of employee theft involves office supplies like pens and paper used for personal gain.
95% of businesses encounter employee theft in every form. 75% of employees confess to stealing from their company at least once. More than 20% of businesses reported cash theft as the primary cause of employee theft.
Employee theft at restaurants is common.
The average age of a perpetrator committing employee theft is 48. The average age of this crime is likely lower in restaurants and food trucks that employs younger staff.
34% of millennials confirm stamping from their employers. (Service Management Group)
Employee theft causes more than 30% of business bankruptcies. (Service Management Group)
40% of employees who steal from their employers had recent HR red flags prior to their theft offense. (SHRM)
Level of education does not discriminate employee theft as all levels from high school graduates to post-graduate degrees are both prone to stealing from their employers. (Service Management Group)
The top industries where employee theft likely occurs are insurance, healthcare, and finance. (Carnegie)
84% of employee theft that happens in the healthcare sector is done due to financial gain. (Carnegie)
The finance and insurance sectors had the most number of perpetrators who are business partners. These are followed by the information technology and the healthcare industries. (Carnegie)
Businesses lose roughly $50 billion each year due to employee theft. (U.S. Department of Commerce)
Employee theft losses are increasing at an alarming rate of 15% annually. (U.S. Department of Commerce)
42% of the total inventory loss in U.S. shops is attributed to employee theft.
Employee theft and fraud brought about a 7% loss on the business’s yearly revenues. A reported 21% of tech employees tend to steal from work. A staggering 28% of retail inventory losses are brought about by employee theft. (Fortune)
The financial services sector had the highest number of employee theft cases with 18%. (Hiscox)
Women make up 56% of funds theft. (Hiscox)
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Only 4% of perpetrators had a previous fraud conviction. (Association of Certified Fraud Examiners)
In 2020, employee theft offenses caused by men were 72% more than losses caused by women. (Association of Certified Fraud Examiners)
Employee theft is committed by 59.1% of men and 40.9% of women. Perpetrators who’ve been stealing for years in 3 out of 10 times before they get caught.
One-third of employee theft cases involve workers working at the company’s finance or accounting department. Who’s watching your bean counters?
75% of employees have stolen at least once from their employer.
90% of all significant theft losses come from employees.
Fraud is bad.
Employee Fraud Statistics
Companies lose an estimated 5% every year due to employee fraud. (ACFE)
42% of employee fraud cases were due to tips usually given by another employee. (ACFE)
A third of employee fraud cases are due to some companies’ lack of controls to prevent such occurrences. (ACFE)
Men comprise 72% of occupational fraud in the workplace. (ACFE)
It is estimated that U.S. businesses lose 20% of each dollar due to be employee fraud. (Ernst & Young)
Companies lose a median of $1.5 million on each fraud case. (Association of Certified Fraud Examiners)
21% of occupational fraud cases culminated in losses amounting to more than $1 million. (Association of Certified Fraud Examiners)
There was an average of $125,000 in losses in each case globally due to employee fraud in 2020. (Association of Certified Fraud Examiners)
The more time an employee spends at a company, the more income is lost due to fraud. (ACFE)
40% of respondents believe that technology makes it simpler to conduct fraud, while 41% believe it makes it more difficult. (Ernst & Young)
The average fraud case lasts 14 months before being discovered. (ACFE)
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The average cost of founder and executive fraud is $600,000, although only 20% of cases are reported. (ACFE)
Almost half of the culprits try to hide their crime by fabricating paperwork. Small firms experience twice the rate of billing and payroll fraud as large corporations. The corporation typically sanctions 80 percent of the perpetrators internally. (ACFE)
Operations, accounting, executive and high management, and sales are the four most typical areas where fraud occurs. (ACFE)
Be careful of tip theft at a restaurant.
Customer information is the aim of healthcare insider fraud, whereas money is the target of finance and insurance insider fraud. (Carnegie)
An external audit, a code of conduct, an internal audit department, and management certification of statements are the most commonly employed anti-fraud procedures in enterprises. (ACFE)
Asset misappropriation is responsible for 86% of cases, whereas corruption is responsible for 43% and financial statement fraud is responsible for 10%. (ACFE)
One-third of fraudsters engage in multiple types of deception. (ACFE)
Private corporations account for 44% of fraud cases, while public companies account for 26%, with a median loss of $150,000 in both situations. (ACFE)
42 percent of fraudsters live beyond their means, and 26% have financial difficulties. (ACFE)
In 79 percent of incidents, more than one person was involved in a crime. (Hiscox)
One-third of the culprits worked in accounting or finance at their organization. (Hiscox)
Between 2018 and2019, the average value of a dishonest employee case climbed by 11%.
When compared to major corporations, the danger of billing fraud and payroll schemes is twice as great in small businesses.
The average fraud case costs a company around $1,509,000. (ACFE)
Billing and payroll fraud occurs at twice the rate in small businesses compared to large companies. (ACFE)
Almost half of perpetrators try to conceal the crime by creating fraudulent documents.
One-third of perpetrators had a hand in their company’s accounting or finance.
Employee Time Theft Statistics
30% of employee theft involves the theft of time.
Around 75% of all businesses in the United States are victims of time theft schemes.
One out of every four people admits to reporting more hours than they actually put in.
Time theft costs employers roughly 4.5 hours each week per employee. (Robert Half International)
The most common sort of employee time fraud, “buddy punching,” costs 75 percent of businesses money. (American Payroll Association)
Late starts, early finishes, extended breaks, unlawful overtime, and pursuing personal activities at work are all examples of time theft.
1 in every 2 employees admits to padding their timesheets by 15 to 60 minutes. (QuickBooks)
Almost 10% of business owners in the United States admit to erasing time from staff timesheets after they’ve been submitted.
Time theft is admitted by nearly half of US employees(49%) and 62 percent of Canadian employees who track time. This costs employers in the United States more than $11 billion each year.
Manual systems such as punch cards, paper timesheets, and time cards are used by 38% of workers in the United States. In Canada, 58 percent of workers still use manual punch cards and timesheets to keep track of their time.
Buddy punching is admitted by 16% of US employees and 34% of Canadian employees who log their time.
The Fair Labor Standards Act was enacted in 1938 to safeguard workers by establishing a regular 40-hour workweek and a minimum salary, but only 43% of US business owners are aware of the law.
More than one-third of time tracking systems are obsolete.
Employers in the United States claim that 80 percent of timesheets submitted by their employees contain inaccuracies. What is the explanation for this? When employees forget to clock in or out, they say it’s because they can’t remember the hours they’ve worked.
Compensatory time (also known as “time off in lieu”) is used by one out of every three private-sector companies in the United States instead of paying overtime to employees, which is a typical FLSA violation.
According to accountants, 92 percent of their clients have a problem with time theft, which adds 5% to their gross payroll expenditures on average.
The US Department of Labor has recovered a total of $2,075,786,993 in back pay and fines for minimum wage and overtime breaches under the FLSA.
Only 16% of business owners in the United States are aware that timesheets must be preserved for at least two years. Approximately one-third of US business owners (36%) are aware that payroll records must be preserved for three years.
Nearly a third(28%) of US employees who keep track of their time admit to working off the clock, which is a major source of pay theft and FLSA claims.
Most Americans value workplace flexibility, with nearly two-thirds saying they would forego a wage raise in exchange for more control over their working hours. (QuickBooks)
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Workers missing shifts is a daily occurrence for nearly one out of every ten businesses in the United States that employ shift workers. Another 18 percent say it happens on a weekly basis. Only 2% of employers claim that their staff never miss a shift.
Employers’ operational costs increase by $633 per month on average when they have to find last-minute substitutes, close early, or pay extra to find cover. That works out to $7,594 each year.
Smartphone users are four times as likely as non-smartphone users to be distracted at work by their phones. Only 10% of those who use a flip phone admit to being distracted, compared to 40% of persons who use a smartphone.
Holding on to good employees is the most difficult task for US business owners who employ shift workers, followed by workers missing shifts, recruitment issues, labor costs, and organizing weekly shift schedules.
During the March Madness basketball tournament, one out of every five US employees works fewer hours. However, the majority of respondents (about 70%) do not believe it has a detrimental influence on their productivity. One in every five people admits to watching games in the restroom.
Employers in the United States normally provide 11-15 vacation days per year, however, 16% of employees receive no paid time off at all.
Around 25% of employees steal from 1-10 minutes per shift, while 41% steal around 11-20 minutes per shift. And around 7% of employees will go so far as to steal more than an hour per shift.
Modern Geofence capabilities ensure employees are clocked in an out automatically when the leave and re-enter the working area
In the United States, around 38% of businesses still use manual time tracking systems, such as punch cards, paper time-in sheets, and hand-written time cards.
Only 66 percent of US workers who track their time are paid by the hour.
FBI Data on Employee Theft
According to the FBI, 30% of employees will never steal; 60% will steal if they don’t think they’ll be caught or think everyone else is doing it; 10% will actively seek opportunities to steal. (FBI)
Corporate theft, or “shrinkage,” as it is known in the business world, is the fastest rising crime in the United States, according to the FBI. Identity theft, cyber fraud, credit card theft, and internet scams are just the tip of the iceberg.
According to FBI statistics, about 75% of employees steal, and the vast majority of discovered theft remains unpunished.
Employee theft is estimated to account for 43 percent of retail shrinkage, according to some experts. (FBI)
It’s considerably greater in banks, where workers are responsible for 84 percent of stolen losses. (FBI)
According to the American Polygraph Association, whose members perform much of the polygraph testing for the federal government and have kept statistics on their members’ findings throughout the years, nearly half of all employees steal at least once. (FBI)
25 percent of that group steals valuable stuff, and 8% steal in volume. (FBI)
According to a 1985 poll conducted by the800-Cocaine National Helpline, 18% of cocaine users indicated they would steal from coworkers to sustain their addiction. (FBI)
A quarter of those polled stated they had been fired from a previous job due to drug use. (FBI)
At work, 44% indicated they dealt drugs. (FBI)
Offer barista’s free coffee while at work to reduce theft.
At employment, 64% stated they had easy access to narcotics. (FBI)
Researchers discovered that 35% of employees who were sent to EAPs by their employer admitted to stealing from them. (FBI)
Employee theft is committed by 69 percent of workers aged 18-22, who account for only 12% of the workforce. (FBI)
A person aged 18 is four times more likely than someone aged 40 to commit a crime. (FBI)
Males are five times as likely as females to commit a crime. (FBI)
The National Institute of Justice estimates that dishonest personnel is responsible for 80 percent to 100 percent of cash shortfalls. (FBI)
In 2018, larceny-thefts accounted for 72.5 percent of all property crimes. (FBI)
During larceny-thefts, the average value of the property taken was $1,153 per crime. The national loss to victims was projected to be $6.0 billion when the average value was applied to the estimated number of larceny thefts. (FBI)
In 2018, the predicted rate of larceny thefts per 100,000 people was 1,594.6. The rate of anticipated larceny-thefts decreased by 6.0 percent from 2017 to 2018, and by 22.8 percent from 2009 to 2018. (FBI)
A bank employee took $88,000 in cash from the bank vault where he worked, according to FBI employee theft data.
According to the FBI, employee fraud and embezzlement are on the rise and can often go undetected for years before being caught. It is fairly uncommon for the employer to discover that the theft was committed by one of its most trusted workers when it is found. (IMUA)
In particular, in 2020, scams based on the COVID-19 epidemic began to arise. ACCORDING TO THE FBI, the IC3 received over 28,500 COVID-19 complaints, with fraudsters targeting both businesses and individuals. (CPO Magazine)
What are the consequences of employee theft?
Employee theft has financial, operational, and psychological ramifications in a workplace. This activity is likely to damage more than just the employee who committed the theft. The revenue that can be saved by implementing a theft prevention program can pay for itself. You can design effective procedures to curb employee theft once you understand how it impacts your restaurant.
Other approach is to simply offer free drinks or meals to employees. For examples, the coffee chain Starbucks has taken this approach with their baristas. When you’re on the clock, you can enjoy any beverage for free. Consider this employee perk for your coffee shop, restaurant, or bar. It’s low cost and could be used to make the workplace more appealing.
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Financial. Stealing material objects, presenting time sheets for hours not worked, embezzling money, and any other type of employee fraud are all examples of serious theft. Only 2.6% of employee fraud cases are detected by company monitoring systems, whereas 40.2% of fraud cases are discovered thanks to a tip from a coworker. Make sure to develop a culture and staff where this isn’t acceptable behavior.
Operational. According to the International Foundation for Protection Officers, employee theft is the cause of one-third of all business bankruptcies in the United States. To offset employee theft losses, a corporation may have to reduce payroll by discharging staff, forego raises, postpone crucial personnel advancements, and put company expansion plans on hold.
Psychological. Employee theft forces the employer to tighten security measures, which can have a ripple effect throughout the workplace. When stronger procedures are implemented to prevent theft, such as surveillance cameras, identity badges, and restrictions on employee access to corporate goods such as office equipment and supplies, tensions can arise between management and employees. All these additional processes can create a lot of extra overhead for a business as well.