A single thief can ruin an organization's finances, shatter morale, and erase months of hard work. Despite efforts by employers to minimize the risk of internal fraud, employee theft statistics show that this type of offense occurs in all areas of business.
Employee crime types range from larceny to embezzlement to expense reimbursement schemes and time theft.
Although two-thirds of all US-based small businesses are victimized by employee theft, only 16 percent of companies call the police to launch an employee theft investigation. Approximately 80 percent of all organizations that fell victim to embezzlement had fewer than 100 employees; just under 50 percent had up to 25 employees.
In 2020, asset misappropriation was the most common scheme that perpetrators used to defraud their employers, accounting for 86 percent of the cases examined globally. Corruption followed next with 43 percent, and financial statement fraud was found in 10 percent of the cases.
The most common methods used by perpetrators to conceal employee theft include creating fraudulent physical documents (40 percent); altering physical documents (36 percent); altering electronic documents or files (27 percent); or, creating fraudulent electronic documents or files (26 percent). Approximately 12 percent made no attempts to conceal the fraud.
Approximately 21 percent of employee fraud cases analyzed in a 2020 survey caused financial losses of more than one million dollars. Financial statement fraud, although rare, is the costliest, with an average loss of $954,000 per incident.
Profiles of employees involved in theft have one thing in common: they are usually the least suspicious. They tend to be smart and well-liked, with access to the organization's funds through title or tenure and possess the skillset to commit this type of fraud. Some 42 percent who steal lived beyond their means and 26 percent were experiencing financial difficulties. "Ripping Off the Boss: 33 Surprising Employee Theft Statistics" www.smallbizgenius.net (Dec. 21, 2020).