Employee theft is perceived by many, to be the biggest threat to retailers and small businesses.
With $50 billion in cash and inventory stolen yearly by employees, is it any surprise that 33% of all business bankruptcies are attributed to employee theft?
Globally, employees are responsible for around 28% of inventory losses, while shoplifters account for 39%. In the U.S. however, employee theft accounts for 43% of lost revenue. That’s about $6 billion more than five-finger discounts taken by shoplifters.
According to The Global Retail Theft Barometer
, 75% of American employees have stolen at least one item from their employer. There’s a different mindset in the worker base here in the U.S. With such high turnover rates, especially among retailers, there is very little loyalty.
Sadly, about 75% of the crimes go unnoticed. And when they are detected many go unreported.
Nearly all businesses have experienced employee theft, but only 16 percent of them actually report the incident to police.
The three primary reasons they go unreported:
- The employer’s attorney advises against it. The legal costs and time involved often outweigh the amount the employee would pay back. Basically, the employer would never recoup the stolen funds.
- Many employees caught stealing have emotional or family ties to the employer and both parties want to put the issue to rest as quickly as possible.
- Business owners assume that police are too busy with other serious street crimes.
Loss prevention consulting firm Jack L. Hayes International
says that ineffective pre-employment screening and less employee supervision are the main catalysts.
- Background checks are the first line of defense in keeping dishonest employees out of your business. In an effort to cut costs, some employers have lowered their standards in pre-screening requirements and are hiring less than ideal applicants.
- Management levels have pulled back and more employees are going under-supervised, creating more opportunities for theft.
When a new employee is hired who hasn't been properly vetted, employers are basically welcoming a stranger into their business.
That stranger has access to your customers, your cash, your inventory, your IT — everything.
Relatively speaking, background checks are an inexpensive investment when you consider the painful cost of keeping a dishonest employee on your payroll for years…
Have questions about Pre-Employment Screening? Let us help! Call us today at 479-595-0419.