Everyone is shocked when corporate executives are led off to jail in handcuffs for employee theft and we shake our heads at the magnitude and greed when hearing of these scandals in the news.

A decade ago Enron collapsed under the weight of a massive fraud that included faulty accounting and business practices.

Small companies have been devastated by bookkeepers who pay themselves a little something extra by submitting bogus invoices and forging cheques.

Related: What I Learned From Working Retail

What is rarely newsworthy is the quantity of loot taken home by employees at all levels on a regular basis.

Employee Theft: No business is immune

Employee theft and fraud is a serious problem in every industry and at every level.

I’m not just talking about taking home a fistful of pens; wrongdoing also includes padding expense accounts, supplier kickbacks, restaurant employees eating the food, and merchandise pilfering.

Canadian retailers lose an estimated $2 million every day to employee theft – almost as much as they lose from shoplifters.

While some corporate executives with huge expense budgets have padded their expense accounts in the tens of thousands of dollars, the most successful thieves take stuff in little bites and stay below the radar.

The thefts may not be discovered until years after they have begun – if ever – and usually by some irregularity.

A study found that the majority of workers believe all employees, at some point, remove items from work for their personal use.

Related: How Did You Choose Your Career?

Interestingly, pens, post-it notes, rulers and envelopes are the most common office supplies taken home.

Fictional accounts

Some crimes are quite creative.  Like the above-mentioned bookkeepers, employees invent all kinds of bogus practices.

Personnel managers authorize salaries for fictitious workers; purchasing agents invent nonexistent suppliers; and executives cook the books to justify year-end bonuses.

Related: How To Spot Investment Fraud

It seems to depend on the opportunities available at his or her level.

Time theft

Many workers who wouldn’t even think about taking home so much as a paper clip are involved in time theft.

This includes coming to work late or leaving early, taking an extended lunch break, excessive socializing on the job and wandering around the office trying to look busy.

It’s quite common for workers to fake sick days to extend their vacation time or for other personal activities.

Related: Getting Out Of The Pile

How many of us check our personal emails, play computer games, post status updates on Facebook or tweet on a regular basis during the work day?

Some people actually use company time and the facilities to operate their own businesses.

Is everyone becoming unethical?

Apparently, taking home a little something extra is a routine practice at all levels of the workplace.  Small time pilfering seems insignificant.  Who would ever miss those little items that seem so abundant?

The majority of those who are caught show no remorse.  They rationalized their behavior by claiming to be mistreated or underpaid – besides the company can afford it.

No matter how a person rationalizes it, though – stealing is stealing.  And stealing is costly – to everyone.

What do you think about employee theft in the workplace?

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7 Comments

  1. Nick Cavalancia on October 17, 2012 at 7:59 am

    Completely agree – Take employee productivity alone. In essence, it’s theft of company time (that is, the employer is paying an employee to work, and the employee is doing personal activities on the Internet). Salary.com did a survey in March about employee’s personal use of the Internet. Percentages of time an employee would take weekly were shown and, while at first glance the majority looked like they spent less than an hour a week, when you apply the percentages to a 100 person company, it totaled the equivalent of 226 employee hours a week, or 6 FTEs annually! That’s a material amount of $ going out the window.

    Also, don’t forget actual data theft – the taking of company documents, etc. A great example is the recent Zynga lawsuit (http://aol.it/U3GjpR) in which a product manager took corporate documents, plans and email with him to his new job. Something as simple as a customer list on an excel spreadsheet taken can cripple a business.

    • Boomer on October 18, 2012 at 2:22 pm

      @Nick Cavalancia: You’re right that employees waste a considerable amount of company time on a daily basis.

      Also theft of customer lists, data, and things like proprietary software by terminated employees cost companies billions, as you say.

  2. Joe on October 17, 2012 at 1:17 pm

    I actually worked with a crook who stole over $200,000 from my employer. Unbelievable breach of trust. And she had the gall to blame the employer in court for making it “too easy”.

    The problem is that, until it’s betrayed, trust is very efficient. Trust is the oil that allows an organization to run. At GM, each person on the line doesn’t fill out a PO, request the part from the person before them, add their part, then invoice the next guy down the line. Corporations, internally, aren’t “free markets”, they’re trust economies – much like families or prehistoric communities.

    • Boomer on October 18, 2012 at 2:26 pm

      @Joe: There have been cases of employee fraud and embezzlement at all of the workplaces I’ve been at. Fellow employees are surprised and shocked to hear about it because most often the perpetrator is someone in a trusted and/or supervisory position. They are so trusted that no-one checks up on them. Amazingly, they often end up at a similar position with another company.

  3. James on October 18, 2012 at 2:12 pm

    One of the biggest scandals that just came to light in my neck of the woods is that of an employee of a well-known department store was ripping them off and then selling the stolen goods online. Here’s the kicker though, this employee was the head of security and had been adamant about decreasing thefts. Though theft of merchandise had declined, he was responsible for at least half of the thefts that did occur. Sadly, they thought they had this great employee, but alas, it was just a cover. His excuse, he was still saving them money. It is unfortunate that this stuff happens all the time, and honestly it is not much of a shock. We have almost come to expect it. When we hear something like this has happened we tend to shrug it off. No surprise there.

    • Boomer on October 18, 2012 at 2:31 pm

      @James: It seems that the higher up in the company the employee is, the more opportunities there are for theft – they can work the system so they won’t get caught (so they think). They seem to have no remorse and have lots of excuses.

      If we shrug off the elaborate schemes, the petty theft that happens most often – and costs a company more than huge theft – is just simply ignored.

  4. Marie at Family Money Values on October 18, 2012 at 5:04 pm

    To me, the sad thing about the time theft is that it seems to be becoming the norm. A lot of workers seem to think a company is wrong to insist on work for the pay they give, and instead believe that they have an right to access the internet during worktime, write posts, shop and gab in the coffee room for hours.

    Some even go so far as to say they wouldn’t work for a company that won’t let them do those things.

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