How to Deal With the Growing Problem of Employee Theft


Peter Daisyme is the co-founder of Palo Alto, California-based Hostinga hosting company specializing in helping businesses with hosting their website for free, for life. 

As a business owner, I have to say that statistics on employee theft are frightening. According to Statistic Brain, $50 billion are stolen from U.S. businesses every year by their own staff, and roughly 75 percent of employees have admitted to stealing from their employer at least once. In the past, it has been something that I have dealt with as a business owner, but seeing the increase in employee theft has given me food for thought on how to handle the situation.

Talk to Your Attorney

As a recent Wall Street Journal article points out, when there's suspected theft, employers must tread carefully, as a wrong move can open you up to serious legal ramifications. For example, the employee could turn around and sue you for defamation of character or unlawful termination. Before you approach the employee, I recommend seeking the legal advice of an attorney that specializes in employment issues. They can provide you with the best advice on how to discuss the theft and protect yourself from a potential lawsuit.

Take Legal Action if Needed

Regardless of the reason an employee may have committed theft, their employment should be immediately terminated. Contact the police, your lawyer and the company's insurance firm if needed. You must have proof beyond a shadow of a doubt that they did steal from the company. I once had an employee who when asked to see what was in their bag, wouldn't show it. Our warehouse camera had footage of him stealing.

It's important that you send a bold message to the rest of your staff that this kind of behavior is not tolerated in any way. Even if employees need financial help, it doesn't change the law or company rules. Depending on the situation, I file a police report or, if it's a considerable theft or fraud, begin paperwork for a lawsuit. As unfortunate as it was, I've had to do this with two former employees.

Minimize Room for Theft 

In order to ensure that there is as little room for theft in your organization as possible, keep a close eye on financials for anything that doesn't seem to add up in terms of an increase in office supplies expenses or discrepancies in the revenue. I can never be too busy to not pay attention to whether there are more fingers in the pie than should be.

You should also ensure that employees are well-paid to begin with. Run background checks, and provide an open-door policy for anyone to talk to you before they reach the point of feeling like they have to steal. I want to ensure my staff is happy, and if they aren't, what can I do to change that for them? This might include helping to cover the cost of therapy or a treatment facility that can turn their life around.

Take the Same Precaution With Everyone 

While I do run background checks, a person's past is not always a reason to stop me from hiring a talented individual. People make mistakes and they deserve another chance. If I do hire someone who has stolen in the past, they are observed just as much as any other employee and have the same result if they do steal from my company.

It's an awful moment when you realize that someone stole from you, especially if it's someone you trusted. However, you should deal with it quickly and efficiently so that others see that this is not tolerated. While it rarely happens in most companies, it's important that everyone knows there are no second chances when it comes to stealing.