Rip-Offs : Firms Target Employee Thefts
Spurred by concerns that economic hard times, layoffs and declining worker loyalty may prompt more employees to steal, retailers and other businesses are stepping up efforts to curb worker theft.
Private security firms said the biggest growth area in their industry is in keeping dishonest employees from helping themselves to computers, office equipment, supplies or merchandise. To nab workers, companies are trying everything from high-tech security systems to undercover agents.
Although no one keeps comprehensive figures on how much is lost to employee theft each year, experts said that economic hard times may make people more inclined to be dishonest. Employees worried about being laid off--or angry because of the way they are being treated as companies buckle down--may find satisfaction in ripping off their employers.
“People just aren’t making the money they used to, so they take what they want,” said Jason Shaw, in charge of investigations for National Loss Prevention Assn., a Southern California security firm that specializes in using undercover agents disguised as new employees to detect employee theft.
Employee thievery can exact a heavy cost on a company, studies show. One study this year showed that a dishonest employee can cost a company as much as seven times more than a shoplifter. That study, an annual survey conducted by consultant Jack L. Hayes International of more than 3,500 retail stores nationwide, showed that while a shoplifter steals an average of $53.32 in merchandise, the average theft by an employee costs the company $387.06.
Mark Scaparro, spokesman for API, a Los Angeles security firm, contends that employee theft is more of a problem in office environments than companies realize.
That is because most organizations don’t keep adequate records of corporate assets and inventory shrinkage, he said.
API offers “risk assessment” to its clients, where specialists in manufacturing, retail or office situations trace the flow of products through a company and offer ways to curb losses.
One of API’s strategies is to adapt security tags--similar to those clipped on clothing that set off doorway alarms in retail stores--to the office environment. By fitting a tag inside a computer that triggers a video camera whenever it gets close to a doorway, the company can identify who took the computer out of the office.
Scaparro said another common problem is theft of petty cash. One of his clients, who kept $200 to $300 in petty cash in the office, didn’t realize someone was regularly stealing from the cash box until API uncovered the problem.
“We put a camera in the ceiling that looked like a smoke detector, so the company saw who came in and headed right to the cash drawer,” Scaparro said.
Other companies rely on people, rather than machines, to watch their employees.
Shaw of National Loss Prevention Assn. said he believes that internal theft is growing--and in most cases, he said, employees with greater seniority take more.
Employees who have worked for a company only a short time take “nickel and dime stuff like a pair of shoes or a razor,” Shaw said, using an example of a retailer. “But employees that are going to be dishonest who have worked for the company for over two years are going to take pallets of merchandise.”
Robert Cherrington, a professor of organizational behavior at Brigham Young University who studies employee theft, has devised what he calls the “disgruntlement theory” to explain why people steal.
After surveying thousands of people on why they were dishonest, Cherrington has come to believe that people who are disgruntled use their dissatisfaction to strike back at the organization--and to find a way to feel that they are justified in doing so.
Not getting the recognition or wages they expected, layoffs, or punishment that is perceived as unfair could all lead to unhappy workers, and hence to a greater likelihood of theft.
Cherrington cites the example of a man parking cars at a sports stadium. Late to work one night, he was sent home without working his shift as punishment for his tardiness.
The next night, although he knew it was against company policy, the man accepted bribes from people who wanted to park in unauthorized areas until he had made up the transportation cost and lost wages from the night he wasn’t allowed to work.
Cherrington believes that, along with character and opportunity, situational pressures such as not being able to pay bills or a drug habit might make it more probable that an employee would be dishonest.
Jack L. Hayes, whose company produces the survey showing employee theft costs more than shoplifting, said that some companies have very little problem with employee theft, while others suffer tremendous losses. He too believes that how a company treats its employees--and hence whether the employees are happy--makes the difference in whether theft is a problem.
Hayes said cost cutting by reducing staff size during the recession has made it easier for employees to steal.
“When you have fewer people on the floor with me as an employee, it’s easier to steal,” Hayes said.
Without additional measures to curb opportunities to steal, Hayes believes that the problem will get worse.
“People make a real mistake in that they underestimate the intelligence of these thieves. Those people work as hard at their job as I do at mine--but their energies are directed at stealing,” Hayes said.
