Employee theft is a sure thing, says CoC

It’s a truism of business that as you gain power, you lose control. Employers must relinquish responsibilities to their employees as a business expands. Finding employees who are trustworthy, then, is of the utmost importance. And it’s harder than you might imagine. The U.S. Chamber of Commerce released the following bleak statistic: three out of four employees will steal, in one form or another, over the course of a year. Most of those employees, the Chamber adds to its report, will do so repeatedly. CBS gathered the following additional statistics:

• A typical organization loses 5% of its annual revenue to employee fraud. Applied to the estimated 2009 Gross World Product, this figure translates to a potential global fraud loss of more than $2.9 trillion.
• Nearly one-third of all employees commit some degree of employee theft, according to Department of Justice.
• Employee Theft Solutions, a division of The Shulman Center for Compulsive Theft and Spending, estimate that one-third of all U.S. corporate bankruptcies are directly caused by employee theft.

What exactly comprises employee theft? Beyond the obvious physical pilfering of company property, there’s faking work injuries for compensation, falsifying expense records, or stealing cash. Unfortunately, the possibilities don’t end there; employee theft is really only limited by brashness and creativity. Recall the audacious story that went viral in January of this year: a software developer outsourced his entire workload to Shenyang, China. He spent his time watching cat videos,  browsing Ebay, surfing Reddit, and, ironically, checking LinkedIn. Undoubtedly, his employers wished he had spent his substantial resourcefulness on software development.

Tamper-evident asset tags will self-destruct or show “VOID” if someone attempts to remove them.

So what can you do to protect your business? Beyond the obvious initial steps of cautious hiring and an asset management system, CBS recommends the following:

• Expect at least occasional theft. As Oscar Wilde said, “I can resist anything but temptation.” People are human. We’re sure your employees are likeable people, but no one is above reproach.
• Make your zero-tolerance policy clear. Whether or not you prosecute criminally is one thing. Continuity of employment will absolutely guarantee continuity of theft. Even more so, it will lower the bar (or open the vault) for every one else in the organization.
• Put in place internal and external checks and balances. Always have a second set of eyes — both inside and outside the company — checking your numbers.
• Know your margins. We can’t stress this enough. Know what your margins should be, and if they’re shrinking, find out why.