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
- Employee Fraud Statistics
- Employee Time Theft Statistics
- FBI Data on Employee Theft
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.
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.
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)
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.