Employee theft statistics reveal that companies are losing millions due to internal frauds being committed regularly.
What’s more worrying is that these thefts have the most devastating effect on entrepreneurs and small businesses, hindering their development in the process.
Employees most commonly start with little frauds, such as swiping a few extra coins from the cash register. However, these types of employee frauds can often go to great lengths, like funneling thousands of dollars to a personal bank account.
Job satisfaction statistics indicate that not all employees are happy with their line of work. This, alongside low wages or auspicious opportunities, are what makes employees turn to stealing.
Let’s take a look at what the latest facts and stats say about stealing from the workplace:
Employee Theft Statistics 2019
1. 75% of employees have stolen from their employer at least once.
(Source: Statistic Brain)
A recent survey conducted on numerous individuals has revealed some troublesome numbers. Namely, every three in four workers have confessed to stealing from their bosses at least once.
Even though this percentage signals a decrease of about 4% over the last two decades, it is still an alarmingly high number of employee theft cases.
2. Over 348,000 dishonest employees were apprehended in 2019 by just 21 large retailers.
(Source: Hayes International)
2019 saw an increase in shoplifting and employee misconduct compared to the year prior, with about 348,000 employees being apprehended in only 21 large retailers.
Based on this employee theft research, these retailers managed to recover well over $136 million, while apprehending the dishonest employees.
3. An astonishing 95% of all businesses in the US are hurt by employee theft.
Now, if our aforementioned stat that three-quarters of employees steal from their employers, then this fact will surely shock you.
According to these employee theft statistics, more than 9 in 10 businesses are subjected to suffer from thievery by their own workers.
4. Employee theft costs US businesses $50 billion annually.
(Source: HP Associates)
The United States Chamber of Commerce has estimated that businesses in the US are affected heavily by employee theft.
Namely, according to these statistics of US businesses, losses amount to a whopping $50 billion annually, putting many companies in jeopardy of bankruptcy.
5. 37.5% of employees have stolen from their employers at least twice.
(Source: Statistic Brain)
If you ask yourself about the likelihood of a business suffering from employee schemes, you should understand that more than one-third of all employees have stolen from their employer at least twice.
These grave employee theft consequences impact not only the business itself but also the US economy, which is noticeable in the next stat:
6. Nearly 30% of all failed businesses directly correlate to employee theft or embezzlement.
(Source: US Chamber of Commerce)
According to these stats from the US Chamber of Commerce, one-third of all failed businesses are directly caused by employee abuse. Theft is not the only worry, as many embezzlement cases have proven to be equally dangerous for the stability of businesses.
Small businesses are one of the most important cogs in the US economy after consumer spending. It is culturally devastating when they fail or close forever as it can have a ripple effect within a community, especially in smaller towns.
Numerous small business bankruptcies statistics provide truth to this statement, as local restaurants and little shops are the lifeblood and truly depend on each other.
7. Bookkeeper steals a total of $600,000 during a six-year period.
(Source: Chicago Tribune)
Renee Johnson (61) was accused and sentenced to jail for stealing from work. As reports suggest, she stole over $600,000 from the restaurant Blackbird and Avec, where she used to work as an accountant.
Johnson was sentenced to two years and four months of jail time in federal prison, even though she was initially facing a four-year sentence demanded by the Assistant US Attorney.
Johnson was found guilty after admitting to stealing money from work in a six-year period.
She tried to explain the situation to the FBI by saying: “You take that first cookie and it tastes good. So you just keep going.” She also believed that she would have never been caught.
8. The likeliest targets subject to bank theft are the elderly and the rich.
Stealing statistics suggest that in contemporary times, you rarely see big money heist situations when a group of thugs comes to rob a bank keeping everyone at gunpoint. Today, the biggest threat comes from within.
Employee theft at banks is the likeliest way someone would steal from a bank today. Their likeliest targets are the elderly and the rich, according to most recent bank employee theft statistics!
Bank employees have direct access to clients’ funds. Sometimes they abuse their position by doing fraudulent activities. They usually target accounts with Social Security payments or those with large amounts of money.
This activity has become more apparent due to the rise of ATM machines and electronic banking. It directly results in tellers being paid less as many processes have become automated.
9. 42.7% of retail shrinkage is due to employee theft.
(Source: Axe Resolutions)
Internal theft data indicate that less than half of all retail shrinkage that occurs within a company store is caused by employee theft.
This alarming stat tells us that shoplifting is the least worrying crime that business owners need to have. According to this, employees are the biggest concern when it comes to inventory loss.
10. 40% of employees who committed fraud have had related HR red flags.
A survey conducted on internal theft statistics indicates that 4 in 10 individuals who commit fraud or theft within a workplace have had a red flag in their dossier by the HR.
The most common warnings are negative performance evaluations and the fear of job loss, which often leads to frequent wrongdoings.
11. 66% of employees are responsible for cyber breaches.
(Source: Willis Towers Watson)
According to these employee data theft statistics reports conducted by Willis Towers Watson, 66% of employees are responsible for various types of cyber breaches.
This could lead to stealing knowledge, which can prove to be more dangerous than other types of theft. Perpetrators are earning money from the stolen information, and it could lead to much more significant money losses for the company. If theft in the workplace isn’t addressed properly and continues, in the long run, it can even damage the reputation of the company.
12. 29% of employees admitted they stole because they were too lazy to buy the product.
(Source: Axe Resolutions)
According to this survey, the majority of employees committed theft because they were too lazy to actually buy the products they stole. The surveyed individuals didn’t rise to the level of corporate theft as 14% of them stole goods in the value of up to $100.
Workplace theft statistics indicate the following reasons:
- Too lazy to buy it – 29%
- Because I can get away with it – 24%
- Needed the money or object stolen – 15%
- Wanted the money or object stolen – 13%
- Felt frustrated/dissatisfied by the job – 12%
- Addicted to stealing – 7%
13. As of 2019, managers routinely order 20% more products due to employee theft.
(Source: The Atlantic)
Employee theft stats suggest that for the past two decades, corporate theft has increased by 10.4%.
This has a mixed effect as production companies have seen an increase in demand. However, this has a negative impact on stores and small businesses, as managers tend to order 20% more products from their suppliers.
Namely, stealing in the workplace has led managers to stock more products than necessary, meaning they spend more to meet the consuming quota.
The stolen items range from a single pencil to an entire pallet taken from a loading dock.
14. Organized retail crime costs $703,320 per $1 billion in sales.
Retailers are in a very bad position in recent times as the activity of reporting organized retail crime has increased. Employee theft facts say that over two-thirds of retailers have reported a theft in the last 12 months.
7 in 10 of them see a need for federal intervention in certain cases. This results in more than $700,000 of cost per $1 billion in sales for retailers.
Employee Theft Statistics 2020
15. Stealing in the workspace starts from small and escalates to enormous measures.
(Source: The Atlantic)
Even the simplest theft can escalate into something much more enormous with time.
This happens due to a social-cognitive mechanism, familiar as moral disengagement, which sees a worker stealing something as minuscule as a pen and erupting into something much larger in time.
The best example of employee fraud going too far comes from a juvenile detention center in Texas committed by Gilberto Escamilla. He was a correctional officer who stole $1.3 million worth of fajita meat during a period of nine years.
Escamilla confessed that he started small and, with time, felt more secure. Things only got bigger to the point that he could not control himself anymore. He was given a sentence of 50 years in prison.
16. Retail employee theft statistics suggest that more than $30 million are recovered yearly.
(Source: Hayes Int.)
Dishonest retail workers have the largest number of opportunities to commit crimes.
This report indicates that companies need to increase security in order to avoid getting trampled by fraudulent activities.
However, it’s also positive to point out that small business embezzlement cases are ending in favor of the business, as we can see astonishing figures being recovered on a yearly basis.
17. 59.1% of employees who commit thefts are male.
(Source: Statistic Brain)
Less than two-thirds of all employees that commit theft within a workplace are male, while women take up 40.9% of all employees who steal.
This research indicates that men are more prone to committing workplace theft, according to these office theft statistics.
18. About 75% of US businesses are affected by time theft.
Time theft is a common phenomena among employees and means they are getting paid for hours they haven’t clocked in right or actually worked.
This can occur in many ways, but the most common ones are by having a buddy clock in other people’s cards, or by inaccurately adding and recording worked hours.
Employee time theft statistics suggest that three-quarters of all businesses are affected by this phenomena called “time theft.”
19. Time theft may cost the company up to 7% of their total gross payroll.
Not only do companies lose millions of dollars due to employee theft and fraud, but they also lose due to time theft.
According to these workplace theft statistics, a company that pays out $1 million in annual payroll, may see losses of up to $70,000 per year!
20. Sweethearting costs businesses about $100 billion annually.
Sweethearting involves an employee using their employee discount to help friends and family buy a certain item. It can also work in helping them receive a refund or even go beyond failing to scan the purchased item or overriding the price manually.
Simply put, the psychology behind this type of employee theft is not to be overlooked or downplayed.
Sweethearting can be done both out of good nature or in malice. Sometimes people simply want to help out another person, but in many cases, it can be due to personal gain.
All in all, businesses lose out on $100 billion a year because of it.
21. 34% of employees who steal from the workplace have a high school degree.
(Source: Statistic Brain)
In terms of education, employee theft statistics indicate that about a third of all employees who have stolen goods from the workplace have finished high school.
What is more shocking is that exactly the same percentage of thefts occur even if employees hold a Bachelor’s degree. Only 11% of employees who were caught stealing from the company have had a postgraduate degree.
22. The average time detection for fraud is 18 to 24 months.
(Source: Statistic Brain)
Employee theft prevention is rather difficult since employers aren’t aware of incidents until it’s too late.
The average time it takes to detect an employee committing fraud is anywhere between 18 to 24 months.
And that’s not all — it is increasingly difficult to prove those accusations, especially if there is insufficient evidence. With that in mind, companies need to ensure they have a solid employee theft policy in place in case things take a turn in the wrong direction.
23. A Vermont individual embezzled more than $1.2 million from various payroll clients.
(Source: AP News)
Wire fraud schemes are also quite frequent, and according to numerous embezzlement statistics, it can have grave consequences on the lives of victims.
One man from Vermont managed to steal from 35 different people, and some of them suffered delayed retirement, bankruptcy, or lost their businesses.
The most common type of embezzlement scheme, and the easiest, is fund theft, which happens 34.5% of the time.
24. Employee theft can be prevented with the 10-10-80 rule.
(Source: Streamline Telecom)
An appropriate way of preventing employee theft in the workplace is following the 10-10-80 rules. This means that an employer should regard the situation where 10% will never steal, 10% will most likely steal, with the remaining 80% being somewhere in the middle.
Employee theft normally takes place within an office. But situations tend to vary, and judging by these employee theft statistics, there are more ways for people to acquire access to funds from the employer for their own benefits.
If all the necessary precautions are taken into account, employee theft could be largely prevented. A regular employer has to think of various ways to make sure that the middle 80% does not turn into the ones that will definitely steal.
Frequently Asked Questions (FAQ)
What causes employee theft?
In order to be able to understand the reason for an employee’s decision to steal from work, we need to know what makes them do it.
It includes three elements:
- Pressure: A certain financial need that the employee is facing.
- Opportunity: A perceived opportunity for the employee to commit theft by having access to a lot of funds.
- Rationalization: An employee justifies the fact of committing theft due to the way they are being treated at work.
Simply put, an employee who is facing a serious financial situation when presented with an opportunity will most likely commit fraud. This is further amplified by bad working conditions or when employees feel underpaid.
How does employee theft affect the economy?
Most people’s lives are invested in their businesses, and it’s quite challenging to succeed, especially in today’s economic environment.
Employee theft plays a vital role here as it can hinder the prosperity of businesses, especially smaller ones.
If a business is forced to go bankrupt, people will get laid off and can’t provide enough to sustain their families. A wave of negative consequences arises that hinder the overall economy of the nation.
For these reasons, employees need to be rewarded adequately in order to decrease theft from the workplace that would potentially hurt the business.
What percentage of employees steal from their employers?
Recent stats suggest that about 75% of all employees have stolen from their employers at least once during their time within their company.
That makes about three-quarters of all employed workers, with 37.5% of them stealing at least twice.
Studies show that employees under the age of 35 are more often the ones committing theft. Older employees, though, tend to steal much more than their younger counterparts.
However, the worst cases of theft and fraud in a company are usually committed by the managers.
How much do companies lose from employee theft?
Companies tend to lose millions of dollars on an annual basis due to employee theft. Based on the size of the company and the number of employees, this amount varies anywhere between $20 million and $50 million.
Small and mid-sized businesses are hit the hardest by employee theft as they represent the majority of all cases or about 68%.
Their median annual loss amounts to $289,864, while the average business loss for all businesses in the US stands at $1.13 million per year.
What type of employee is most likely to steal from employer?
The most common belief among employees who commit thefts is the ‘low pay.’ According to experts, those that constantly complain about being underpaid are most likely to be the thieves when a theft occurs.
However, it’s wrong to state that they are the only ones to steal. Most crimes occur when an individual is given too much control and responsibility with little-to-no oversight. This means that upper management is also susceptible to steal, as they are the ones that no one would suspect at first.
In terms of education, employees with a high school diploma are just as likely to steal as those with a Bachelor’s degree.
How often does employee theft occur at banks?
According to the latest research data available, internal bank employee thefts are nine times more costly than actual bank robberies.
Up to three-quarters of all schemes, embezzlements, and frauds that occur within banks are done so by an inside job. This means that employee theft occurs quite frequently within banks.
The rich and the elderly are at an increased risk when mostly tellers and other bank branch employees wire funds from their accounts without prior authorization. However, the most desired accounts are those with high balances, as well as that have direct deposits of government funds.
What is time fraud?
Time fraud is a type of fraud that occurs when an employee records hours they did not work, yet receives payment for them.
‘Buddy punching’ is a term often used to describe a time card fraud, when one employee punches the cards for others if they are running late or need to leave early for various reasons.
Even though there are no specific employee time theft laws, they are considered a crime but are rarely prosecuted.
Pressure, opportunity, and rationalization are the most common elements of why employees decide to steal from their employers.
It is an issue that employers need to find creative ways to deal with. Unemployment statistics also support this fact since many people are laid off due to fraud happening at work.
These employee theft statistics state that people who are facing a bad financial situation are more prone to stealing. But it’s also safe to say that those in a solid financial standing may benefit from reaching into a business’ resources whenever an opportunity presents itself. Preventing theft completely is nearly impossible, but there are ways to lower the percentage and take necessary precautions to preserve the well-being of the company and its employees.