Forensic Accounting
Brand Protection
Computer Forensics
Corporate Investigation

Volume 8 - No. 1                    Download PDF

In this edition of 
The Kessler Report:

Staying a Step Ahead of Stock Scams

Boiler Rooms Go
High-Tech: Online Investment Fraud

Signs You're Dealing With a Smooth Criminal

Web Monitoring Firms: Far Reaching or Far-Fetched?

Non-Compete Agreements: The Extra Step in Intellectual Property Protection

Q&A: Theft in the Workplace

Kessler's Corner:  Investment Fraud

FYI: Operation
Brand Aid

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Q & A

These days, businesses not only have to worry about protecting their property (both physical and intellectual) from outsiders, but they also have to keep an extra close eye on their own employees.  Employee theft costs companies billions of dollars each year, and the culprits are sometimes the ones you least suspect.

Q:  Who is usually responsible for theft in the workplace?

A:  Theft occurs at every rung on the company ladder, from the janitorial staff to chief executives, and in most offices, employees are pilfering with alarming regularity.  While many of those employees may merely swipe a sticky pad or pen on occasion, some of them are going after much more valuable targets, such as fellow employees' wallets, computer software, electronic equipment or even company financial records.

Although petty theft is more widespread among low-level employees, it is usually senior workers that do the most damage.  Trusted, high-level managers and executives are often able to make off with much greater amounts of money and goods simply because they have the ability to cover it up.

Q:  Why do so many employees steal? 

A:  Employees rarely steal because they are financially strapped, but because the opportunity presents itself and workers take advantage of it.  Employees see their co-workers getting away with theft, so they join in.  Though a few workers may steal because they are truly destitute, in the end, greed is the prime motivating force behind employee theft.

Many companies are relatively lax about keeping track of office supplies, and usually write off losses as the cost of doing business.  They may try to avoid uncomfortable situations by disregarding inventory shortages and declining profits, but this lenient approach can sometimes result in major losses, or even destroy the business.

Another reason that employees might have sticky fingers is revenge or simple vindictiveness.  Unfortunately, these workers may take something much more valuable than mugs with the company logo.  Employees with knowledge of combinations or passwords, proprietary practices, or trade secrets may be especially dangerous to a company's bottom line if they are let go and believe they have nothing to lose.

Q:  What steps can employers take to decrease employee theft?

A:  The most important thing employers can do to protect their assets from their own employees is to be more suspicious.  Many businesses make the mistake of misinterpreting signs of theft as employee error.  Overt measures such as surveillance cameras can make employees uneasy and create morale problems, but there are certainly some office-friendly methods of cracking down on employee theft.  

• Don't hire problems.  Background checks can not only lead you to criminals who have told you otherwise, but they can also provide other useful information, such as if a job seeker was fired for stealing supplies at a previous position.  A screening could also reveal whether an applicant has lied on their resume, which may say something about their level of integrity.

• Establish company-wide security measures.  Small, but important, practices such as putting financial operations in the hands of more than one person, or having regular inventory audits can drastically cut down on losses, and may lead you to those who are ripping you off.

• Educate your employees.  Show your workers, from mail clerks to top-level managers, how theft in the workplace can have serious repercussions on the company's bottom line.  Encourage workers to help reduce internal theft, outline procedures for reporting incidents, and clearly explain the consequences for dishonesty.  An anonymous tip program may also compel employees to report information that would otherwise mark them as snitches.

• Consider prosecution.  This is often used as a last resort, and the legal fees can add up, but this can work as a strong deterrent to others who may be thinking about stealing from the workplace.

If your business is experiencing problems with employee theft, chances are you're making it easy for them.  However, a little foresight and increased scrutiny can help reduce your problems without turning your office into a police state.

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