A recent survey performed through the University of Cincinnati suggests that small business owners only report employee theft around 16% of the time. Keep in mind that 64% of the businesses surveyed reported being victims of employee theft.
The reasons why small business owners are not reporting the theft are not what you would imagine.
Why small businesses don’t report the theft
The survey found four reasons that most small businesses weren’t reporting theft:
First, many see employee theft, as long as it is relatively small, as being harmless since there is no “real victim”. Companies need to realize that these small thefts will add up, and they could lead to employees becoming bolder when they realize there are no actual legal implications to theft.
Second, an attorney might tell you that it’s not worth the cost and the hassle of going to court with the person. Sometimes, it can be more difficult for the business to recoup the funds, and the attorneys will advise that it makes more financial sense to avoid litigation. The employer should still fire the employee though.
Emotional ties are another factor. Sometimes, employees who are stealing are actually friends or family members. This can make it difficult to bring the case to the legal system, and regardless of what happens it will cause rifts in relationships.
Finally, some businesses simply feel that the criminal justice system will not do an adequate job.
Employee theft still a huge problem
We’ve posted about numerous cases of employee theft in the news lately, but here are some more recent examples from the first part of October:
A former employee of the public library in Athens, Alabama was recently charged with taking money from the library. They said that she stole more than $17,000 for her personal use through manipulating payroll and making fraudulent credit card charges.
An employee of a beer distributor in Danville, Pennsylvania was charged with stealing $325 in cash as well as small kegs of beer worth an additional $180. He took the money from the register and a bag near the register. When the company realized money was missing, they went back and looked at the surveillance footage and found that it was their employee, Brandon D. Baylor who was stealing from them. He’s been ordered to pay restitution for the amount stolen, and he is naturally no longer an employee with the distributor.
Dealing with the theft
Employee theft for businesses large and small happens all of the time. You should be able to trust your employees, but you can’t turn a blind eye when you feel something’s amiss. It’s always a good idea to have a surveillance system in place, as well as incentives for employees who are willing to come forward and blow the whistle on their peers who are stealing. It may also be a good idea to consider hiring investigators to look at the situation, root out the thieves, and set an example for other employees that theft will not be tolerated. This removes you and your personal feelings from the situation, and that can be very helpful in resolving the issue the right way.