56 Relevant Employee Theft Statistics: 2024 Data on Perpetrators & Prevention

Is your company a victim of employee theft? It may very well be, considering that 95% of businesses encounter problems with employee theft. And it’s not just cash that’s being targeted. Company and customer data is also a hot item for insiders who want to steal from an organization. That’s why it has become necessary to implement prevention and detection tools like IT security software to protect your organization against employee theft.

To learn more about this problem, we’ve collected some of the most relevant employee theft statistics you need to know for 2021 and beyond. These data points will help you know where, how, and who are the people behind the crimes happening in organizations. You’ll also find out what are the different types of employee theft so you can prepare your defenses for your business.

General Employee Theft Statistics

Cases of employee theft in the workplace are increasing and it seems like small businesses are more susceptible to the problem. According to one study, more than half of employees steal from small businesses. Also, 75% of employees admitted to stealing from their employers at least once.

Wondering where theft happens? The best departments to start your investigations include operations, accounting, upper management, and sales as these are the top departments where occupational fraud cases have been discovered.

• 95% of businesses encounter problems with employee theft (California Restaurant Association, n.d.).
• 47% of companies experienced fraud in the past 24 months (PwC, 2020).
• 39% have experienced more than one case of employee theft (Risk Management Magazine, 2019).
• Six is the average number of fraud cases reported per company (PwC, 2020).
• Cases of employee theft increased from an average of 323 apprehensions per retailer in 2018 to 560 in 2019 (NRF, 2020).
• Meanwhile, shoplifting and ORC apprehensions also increased from an average of 509 cases in 2018 to 698 in 2019 (NRF, 2020).
• 49% of respondents said that the largest increase in fraud occurred in stores, while 26% said it happened online. (NRF, 2020).
• Another 19% cited multichannel sales, including buy online, pickup in-store (BOPIS) (NRF, 2020).
• More than three-fourths of all occupational fraud cases came from these high-risk departments: Operations (15%), Accounting (14%), Executive/Upper Management (12%), Sales (11%), and Customer Service (9%) (ACFE, 2020).
• 75% of employees admitted to stealing from their employers at least once and 37.5% of employees have stolen at least twice (Static Brain, n.d.).
• 64% of employees steal from small businesses, showing how small businesses are very susceptible to employee theft (Complete Controller, 2019).
• 79% of embezzlement cases involved more than one employee. The average number of employees involved is three (CUTimes, 2019).

Profile of Perpetrators

• 33% of embezzlers worked in the accounting or finance department (CUTimes, 2019).
• 85% of embezzlement cases were perpetrated by an employee at the managerial level or above (CUTimes, 2019).
• 41% of occupational fraud cases were perpetrated by employee-level staff, 35% were done by manager-level personnel, and 20% were committed by owners/executives (ACFE, 2020).
• 64% of occupational fraudsters had a university degree or higher (ACFE, 2020).
• Males committed more occupational fraud (72%) than females (28%) (ACFE, 2020).

Statistics on the Types of Employee Theft

Stealing physical cash is not the only form of employee theft. Others include time theft and inventory theft. Data theft is also a constant worry among businesses. In fact, businesses worry about data breaches the most.

• The most common embezzlement methods include billing fraud (18%), cash on hand (15%), theft and larceny (11%), check and payment tampering (10%), payroll (10%), skimming (9%), and cash larceny (9%) (CUTimes, 2019).
• 75% of US-based businesses have problems with time theft (Smallbizgenius, 2021).
• 20% of every dollar earned by a company in the US is lost to employee time theft (Workforce.com, 2021).
• Theft of non-cash property increased from 10.6% of company fraud cases in 2002 to 21% in 2018 (SHRM, 2019).
• 57% of database breaches involved insider threats within an organization (Verizon, 2019).
• 25% of insider data theft involved the theft of privileged users‘ credentials (Ponemon Institute, 2020).

Cost of Employee Theft Statistics

There’s no question that businesses lose a lot from dishonest employees. A recent report where 5,000 companies were surveyed on fraud estimated that total financial losses amounted to $42 billion. Another study revealed that businesses lose 5% of their annual revenue to employee fraud and abuse.

The losses incurred from employee theft are not just in terms of cash. Time and resources are also wasted on combatting various types of employee theft. For example, 1/4 of companies reported losing customers and time after discovering cases of employee theft.

• In a survey of 5,000 respondents, the total reported loss due to fraud was $42 billion (PwC, 2020).
• Businesses lose 5% of their annual revenue to employee fraud and abuse. The median loss per case is $125,000, while the average loss per case is $1,509,000 (ACFE, 2020).
• It’s estimated that 30% of business bankruptcies are due to employee theft (Bell, 2021).
• 13% of those who’d experienced fraud said they’d lost $50 million and more (PwC, 2020).
• The average loss to a business of embezzlement case was $357,650, of which, on average, only 39% was recovered through settlements, restitution, or insurance claims (Risk Management Magazine, 2019).
• Around 15.2% of all employee-related shrinkage cases in US retail resulted in a loss of between $1,000 and $1,999 in 2019 (National Retail Security Survey, 2020).
• Losses from theft, fraud, and other retail “shrink” in 2019 totaled $61.7 billion, up from $50.6 billion in 2018 (NRF, 2020).
• US retailers lost an average of $1,139.32 per dishonest employee incident in 2019 (National Retail Security Survey, 2020).
• After discovering employee theft, 29% of companies laid off employees. Meanwhile, 27% increased their spending on auditing, 26% lost customers and time discussing security and audit requirements, 25% went on to purchase or enhance current insurance coverage, and 24% switched auditors (CUTimes, 2019).

The statistics also reveal some interesting connections between a perpetrators’ position, educational background, age, and tenure, and the amount of financial damage caused by their crimes. Additionally, it’s clear that the longer employee theft goes on, the bigger the financial losses will be, which emphasizes how crucial it is for companies to detect employee theft as early as possible.

• Occupational fraud caused by owners/executives is the least common (20%) but is the most financially damaging to a company with a median loss of $600,000 (ACFE, 2020).
• Employee fraudsters who have been with their companies for six years and more caused twice the median loss ($200,000) compared with less-tenured employees five years and below ($100,000) (ACFE, 2020).
• Fraud by employees aged 55 and above caused much larger median losses at $425,000 compared to those committed by employees aged 40-54 ($150,000) and aged 40 and below ($75,000) (ACFE, 2020).
• Male fraudsters caused a much larger median loss ($150,000) compared to females ($85,000) (ACFE, 2020).
• Fraud caused by employees with a university degree or higher had a median loss of $195,000, while those caused by employees without a university degree had a median loss of $100,000 (ACFE, 2020).

Reasons for Employee Theft Statistics

When it comes to motives for employee theft, money is still the main reason for many culprits. However, it’s also important to know that employees who hold a grudge against their companies are also inclined to “take revenge” by stealing or committing fraudulent acts. In most cases, you can spot employee fraudsters through behavioral red flags such as living beyond their means, excessive control issues, or irritability.

• 71% of data breaches are motivated by money (Varonis, 2019).
• 86% of breaches were financially motivated (Verizon, 2020).
• The most common behavioral red flags include living beyond means (42%); financial difficulties (26%); unusually close association with a vendor or customer (19%); excessive control issues or unwillingness to share duties (15%); irritability, suspiciousness, or defensiveness (13%), “wheeler-dealer” attitude (13%), and divorce or family problems (12%); (ACFE, 2020).
• 40% of employee fraudsters had experienced some form of HR-related red flags prior to or during the time of their frauds. The most common red flags are negative performance evaluation (14%) and fear of job loss (13%) (SHRM, 2019).
• 80% of fraudsters faced some form of internal discipline from the victim organization (ACFE, 2020).

Employee Theft Prevention and Detection Statistics

Cases of employee theft seem to be more pervasive in small businesses than large companies. This might be attributed to smaller businesses not having the same amount of financial and skilled resources to dedicate to fraud prevention and detection tools and fraud awareness training. It can also be a lack of knowledge of the different ways to improve the security of a business.

Close to half of the cases of employee theft were discovered, thanks to a combination of fraud awareness training and tips from other employees. Still, more work needs to be done in detecting employee fraudsters as 70% of cases lasted more than a year before getting discovered.

• 48% of fraud cases were detected through a tip from an employee (ACFE, 2020).
• Among 5,000 surveyed respondents, only 56% conducted an investigation into their worst fraud incident (PwC, 2020).
• Companies with fraud awareness training are 56% more likely to prevent fraud as employees give tips compared to only 39% for companies without training (ACFE, 2020).
• Among priorities of loss prevention teams, 61% cited organized retail crimes (ORC), 59% prioritized ecommerce and cybercrime, 58% focused on internal theft, and 54% prioritized return fraud (NRF, 2020).
• The top four concealment methods used by employee fraudsters include creating fraudulent physical documents (40%), altering physical documents (36%), altering electronic documents/files (27%), and creating fraudulent electronic documents/files (26%) (ACFE, 2020).
• 12% of cases did not involve any attempts to conceal the fraud (ACFE, 2020).
• Charges are only brought in 45% of embezzlement cases. Among these cases, just over half (58%) resulted in a conviction (Risk Management Magazine, 2019).

Time to the discovery of employee fraud 

• On average, it takes about 14 months to detect a typical employee theft scheme (Smallbizgenius, 2021).
• 70% of employee theft cases lasted more than a year, while 31% went on for three years or longer (CUTimes, 2019).
• A typical fraud case lasts about 14 months before it’s detected (ACFE, 2020).

Prevention and detection tools

• The use of targetted anti-fraud controls has increased in the last decade. These include hotlines (13%), anti-fraud policy (13%), fraud training for employees (11%), and fraud training for managers/executives (9%) (ACFE, 2020).
• 52% of retailers said they are allocating additional technology resources to fight losses, while 36% said they are increasing loss prevention budgets. 30% said they are adding loss prevention staff (NRF, 2020).
• Phone hotline and email were used by whistleblowers in 33% of cases (ACFE, 2020).
• The top five loss prevention systems in use include burglar alarms 92.1%, digital video recorders 84.1%, armored car deposit pickups 68.3%, POS data mining 65.1%, and live customer visible CCTV 61.9% (NRF, 2019).

What are the costs of recovery after employee theft?

Recovering from employee theft involves more than just recouping financial losses; it often entails significant operational, legal, and reputational expenses. Understanding these additional costs can help businesses plan for comprehensive recovery strategies:

• Legal Fees and Litigation Costs: Pursuing legal action against an employee involved in theft can be costly, especially if the case is complex or involves large sums. Legal fees often include attorney costs, court fees, and expenses related to gathering evidence, which can quickly escalate.
• Insurance Premiums: Companies may have insurance that covers certain types of fraud, but making a claim can lead to increased premiums in the future. Additionally, the reimbursement process may only cover a fraction of the actual losses, leaving businesses to shoulder the difference.
• Increased Security and Monitoring Expenses: After a theft incident, many businesses invest in new or upgraded security measures, such as surveillance systems, anti-fraud software, or employee monitoring tools. These investments add recurring costs, as ongoing monitoring and maintenance are essential to prevent future incidents.
• Productivity Losses: Employee theft investigations often require time and attention from management and staff, which can disrupt regular workflows and reduce productivity. Team morale can also suffer, affecting overall efficiency and leading to potential revenue loss.
• Reputation Management: In cases where employee theft becomes public, companies may face reputational damage, especially if customer or client data was involved. Some businesses invest in public relations efforts to restore trust, which can be an unplanned expense.
• Employee Training Programs: To prevent future incidents, companies may implement fraud awareness and ethics training programs. While effective, these initiatives require time and financial resources for regular sessions, materials, and expert facilitators.

Simplify Employee Theft Prevention

As we’ve seen in the employee theft statistics above, there are many types of employee theft, along with several ways employees can commit these crimes, and many other situations where theft can happen. So, it might not be totally possible to eradicate employee theft but you can have tools in place for prevention and early detection.

Aside from investing in technology that can help fight employee theft, it is also worth it to train your employees in fraud awareness. Based on findings, companies were able to significantly improve fraud detection via tips when they provided fraud awareness training to their employees. In other words, don’t just rely on technology. You also need to rely on your people to successfully fight insider threats and employee theft. For more on how to prevent insider threats, we recommend reading up on the latest cybersecurity trends for 2021.

Key Insights

• Prevalence of Employee Theft: An overwhelming 95% of businesses face issues with employee theft, with small businesses being particularly vulnerable.
• Common Departments for Theft: High-risk departments for occupational fraud include operations, accounting, executive/upper management, and sales.
• Types of Theft: Employee theft extends beyond cash to include time theft, inventory theft, and data theft, with 75% of businesses facing time theft issues.
• Financial Impact: Businesses lose 5% of their annual revenue to employee fraud and abuse, with a median loss per case of $125,000 and an average loss of $1.5 million.
• Motivations and Red Flags: The primary motivations for employee theft are financial gain and personal grievances, with common behavioral red flags including living beyond means and excessive control issues.
• Detection and Prevention: Fraud awareness training and tips from employees are effective in detecting fraud, with 48% of fraud cases detected through employee tips.
• Concealment Methods: Common methods of concealing fraud include creating and altering physical and electronic documents.

FAQ

1. What percentage of businesses encounter employee theft? Ninety-five percent of businesses encounter problems with employee theft.
2. Which departments are most susceptible to employee theft? The high-risk departments for occupational fraud include operations, accounting, executive/upper management, and sales.
3. What are the most common types of employee theft? The most common types of employee theft include cash theft, time theft, inventory theft, and data theft.
4. How much revenue do businesses lose to employee theft annually? Businesses lose 5% of their annual revenue to employee fraud and abuse, with median losses of $125,000 per case.
5. What are the common motivations for employee theft? The primary motivations for employee theft are financial gain and personal grievances against the company.
6. What are some behavioral red flags of potential employee theft? Common behavioral red flags include living beyond means, financial difficulties, close association with vendors or customers, and excessive control issues.
7. How can businesses effectively detect and prevent employee theft? Effective detection and prevention methods include fraud awareness training for employees, establishing hotlines for reporting fraud, and implementing robust anti-fraud controls.
8. What are the common methods employees use to conceal theft? Common concealment methods include creating fraudulent physical documents, altering physical and electronic documents, and creating fraudulent electronic documents.
9. How long does it typically take to detect employee theft? It takes an average of 14 months to detect a typical employee theft scheme.
10. What measures can businesses take to prevent employee theft? Businesses can invest in fraud detection technology, provide fraud awareness training to employees, establish clear anti-fraud policies, and encourage a culture of transparency and accountability.

References:

1. ACFE (2020). Report to the Nations. Retrieved from ACFE
2. Bell (2021). Employee time theft: How to uncover and prevent it. Retrieved from Workforce.com
3. California Restaurant Association (n.d.). Employee Theft: Why Do Employees Steal? Retrieved from CRA
4. Chilingerian and Schafer (2019). Hiscox Study Confirms Prominence of U.S. Employee Theft. Retrieved from CUTimes
5. Complete Controller (2019). Employee Theft: Why Most Small Businesses Don’t Report It. Retrieved from Complete Controller
6. Karpp (2019). Protecting Against Employee Theft. Retrieved from Risk Management Magazine
7. Milenkovic (2021). Ripping Off the Boss: 33 Surprising Employee Theft Statistics. Retrieved from Smallbizgenius
8. NRF (2019). National Retail Security Survey. Retrieved from NRF
9. Petters (2021). What is an Insider Threat? Definition and Examples. Retrieved from Varonis
10. Ponemon Institue (2020). 2020 Cost of Insider Threats Global Report. Retrieved from Ponemon Institue
11. PwC (2020). PwC’s Global Economic Crime and Fraud Survey 2020. Retrieved from PwC
12. Shearman (2020). Retail shrink totaled $61.7 billion in 2019 amid rising employee theft and shoplifting/ORC. Retrieved from NRF
13. Static Brain (n.d.). Employee Theft Statistics. Retrieved from JW Surety Bonds
14. Verizon (2019). Insider Threat Report. Retrieved from Verizon
15. Verizon (2020). 2020 Data Breach Investigations Report. Retrieved from Verizon
16. Wilkie (2019). Why Is Workplace Theft on the Rise? Retrieved from SHRM

By Louie Andre

B2B & SaaS market analyst and senior writer for FinancesOnline. He is most interested in project management solutions, believing all businesses are a work in progress. From pitch deck to exit strategy, he is no stranger to project business hiccups and essentials. He has been involved in a few internet startups including a digital route planner for a triple A affiliate. His advice to vendors and users alike? "Think of benefits, not features."