No matter how much time and money you spend strengthening your company culture and investing in your people, your business may still be affected by employee theft—of money, of confidential data, of time. Understanding this issue is key to combating or even preventing it.
A Quick Overview of Employee Theft Statistics
- 22% of small businesses have experienced employee theft
- 88% of employee theft includes attempts to hide the fraud
- Small businesses are more likely to deal with check/payment tampering and skimming than other businesses
- 42% of employee theft is detected by inside tips
Read through the employee theft statistics and trends below and learn where you may be at risk, how much employee theft could cost your business, and, most importantly, what you can do to lessen its impact.
General Employee Theft Statistics
1. 34% of fraud cases in small businesses are internal/employee-related (Verizon)
Fraud cases among small businesses are either external (69%), internal (34%), or a combination of both (3%). Of these, the most common fraudulent activity is due to system intrusion, social engineering, and privilege misuse.
2. 22% of small business owners have had employees steal from them (Business.org)
In an anonymous survey of 700 small business owners, 22% claimed that employees have stolen from them. Money, time, and electronics are some of the most stolen items.
3. Businesses nationwide spend upward of $11 billion on technology to detect fraud (Fortune Business Insights)
Cloud technology is a growing trend for the detection and prevention of fraud. It allows for immediate tracing of online cybercrimes, as well as predictive analytics, machine learning, and customer-profiling techniques. Companies in North America have reported spending $11 billion on this anti-fraud technology in 2022, with a projected spend of $129 billion by 2029.
4. Almost half of reported fraud cases happen within financial-related departments (ACFE)
Most employee theft tends to happen in departments with access to financial-related information like invoices, payroll processing, financial statements, and sales forecasts. Operations accounts for 15% of cases, followed by Accounting (12%), Sales (11%), and Executive/Upper Management (11%).
Check out our tips for effectively managing your payroll and keeping your payroll data secure.
5. An employee theft incident costs retailers 3x as much as a shoplifting incident (NRF)
According to the 2021 National Retail Security Survey from the National Retail Federation, the average loss per employee theft incident for retailers is more than $1,500 compared to $460 per shoplifting incident. Half of the survey respondents reported an average dollar loss of at least $1,000 per employee theft case.
6. 88% of employee theft cases include attempts to hide the fraud (ACFE)
Since employees are more likely to commit theft when they believe they can hide their misdeeds, securing your documents and having a separation of duties can go a long way in theft detection and theft deterrence.
Risk-specific Statistics on Employee Theft
Below are some statistics that may help you uncover what type of theft your company is more likely to be susceptible to.
For more information on the different types of employee theft and ways to prevent it, please view our article on employee theft.
7. 68% of companies say they experienced new fraud and an increased risk of employee misconduct following COVID-19 (PwC)
Fraud that involved employee misconduct and new fraud represented over half of the fraud cases organizations experienced following COVID-19, according to a 2022 PwC report. With a shift to remote work and digital communications, companies saw an increased risk of theft by employees of valuable corporate data.
8. Billing and non-cash fraud represent 38% of employee theft cases (ACFE)
Billing theft can include an employee inflating invoice prices to customers, submitting an invoice for non-work items, or completing false invoices. Non-cash theft can include inventory theft like merchandise or data theft like passwords and user identification. These two items represented the two largest risk categories in the Association of Certified Fraud Examiners’ Report to the Nations study.
9. Small businesses are more likely to deal with check and payment tampering and skimming than other businesses (ACFE)
Small businesses are more susceptible to employee theft than larger businesses in two areas: check and payment tampering and skimming. This can be a result of one employee performing multiple roles with no oversight, lack of internal controls, or a high level of employee trust within the organization.
10. Over 70% of data breaches include an employee abusing their data privileges (Verizon)
According to a recent Data Breach Investigation report by Verizon, most employees who steal employer data are doing so for financial gain. They are also most likely to steal personal data over all other types of data types.
Employee Theft Prevention & Mitigation Statistics
With all of the information about the seriousness and frequency of employee theft, you may feel like there is not much that a company can do. Fortunately, there are multiple steps that an organization can take to protect itself.
11. 98% of companies have cybersecurity concerns with employee turnover (Code42)
In a key finding by Code42, businesses are concerned that departing employees unknowingly or intentionally expose them to fraud vulnerabilities. It is reported that 71% of companies lack visibility over the sensitive data that former employees take to other companies. Additionally, they are concerned that company data is saved on personal computers or cloud-based hard drives.
12. 42% of employee theft is detected by inside tips (ACFE)
Employees are more likely to detect theft by fellow co-workers than any other company stakeholder. Creating a system for employee tip reporting (via email, web, or phone); conducting company training to encourage whistleblowing; and building healthy dialogue between employees, management, and leadership can go a long way to help detect theft.
13. Only 21% of a company’s cybersecurity budget is dedicated to insider fraud mitigation (Code42)
Unfortunately, companies cannot completely protect against fraud—but having a dedicated fraud prevention program can save your business money even when fraud is committed. Less than a quarter of all companies have a budget to protect against employee fraud. Those with a dedicated fraud prevention program saved money in remediation efforts, fines, and penalties.
Bottom Line
Employee theft, and theft in general, can be a concerning topic for many organizations and their leaders. With the above statistics, you can provide a strong case to implement theft prevention measures like security cameras, inventory controls, an employee tip hotline, cybersecurity software, and employee background checks. Understanding the issue and implementing these measures can help protect your business and lessen the impact of employee theft at your workplace.
