As Economy Sinks, Employee Theft Rises

Employee Theft Rises as Economy Sinks

The news is full of reports about the economy’s affect on rising crime rates in communities all over the country. Police departments are issuing warnings, and encouraging citizens to increase their security measures at home, in their cars, and when visiting ATMs. In today’s down economy, more people are hurting; and unfortunately, more people turn to stealing.

Business owners must be vigilant, too—and not only against external threats like burglaries. Your employees may be stealing more, too. While employee theft is not a new issue, studies show that it increases for employers of all sizes during tough economic times. In fact, 24% of respondents to a study conducted by the Institute for Corporate Productivity reported that internal theft of company-owned items in their workplaces had risen during the current economic crisis. And 18% responded an increase in monetary theft, such as cash or padding expense reports.

Whether they’re taking company-owned items like office supplies or food, products they produce, electronic equipment or cash, employees’ illegal activity is a huge problem for employers.

Often, it’s highly regarded employees who turn to stealing when the economy is bad. They might be feeling the pressure of an unemployed spouse or partner. Attitudes can suffer when there is more stress at home or when workloads increase, or wages decrease. Layoffs affect even the employees who survive them.

Other employees might feel they are underpaid and deserve a little “extra,” or they may see their coworkers stealing and getting away with it. They may feel slighted by declines in perks or benefits. Some might even feel vindictive for friends who have been laid off from the company, so they “get even” by stealing.

Whatever the cause, communication remains vitally important, especially during times of crisis. If additional security measures become necessary, address the issue directly with employees. Conduct more frequent audits and require receipts with expense reports.

Most importantly, when it’s time to hire again, employment background checks will help you hire honest employees, who are more likely to remain honest—in good and bad economies.

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