Everyone suffers from theft.  You’ve heard that countless times before. 

Now, more than ever, as COVID ravages the financial strength of millions of Canadians across the country, preventing corporate theft is becoming more critical.

Corporations doing their utmost to survive the pandemic by cutting costs and deepening corporate debt are already being stretched thin.

The last thing companies need is the increased problem of workplace theft.  Unfortunately, as the financial landscape takes a downturn, the motivation to commit theft rises.

The Powerful Impact of Employee Theft

Many studies on workplace theft have shown that internal shrinkage outnumbers external theft by up to 3 to 1.  Employees are more likely to steal inventory than a member of the general public.  ASIS International estimates in its “CRISP REPORT” titled: Strategies to Detect and Prevent Workplace Dishonesty, by Read Hayes, PhD that “between 40% and 50% of all business losses can be attributed to employee theft.”

Why?  The “theft triangle” provides answers.

The Theft Triangle - Why People Steal

From within the criminal point of view and mindset, there are 3 primary factors that strongly influence the likelihood of theft.

1. Motive

What will the criminal gain?  How valuable is the asset?

2. Opportunity

The unique circumstances that present a chance to remove the asset.

3. Consequences

What is the probability of being caught?  If caught, what will happen?  How much punishment or personal harm will be done?  How significant will the impact be on others involved?  Will it even matter?

Understanding Workplace Theft

The social dynamics in a workplace and the “company culture” are a significant predictor of employee theft.  Despite a low motivation to steal, employees might be more inclined to commit theft due to peer pressure and attitudes from co-workers, feelings towards managers and supervisors, and thoughts about the impacts of their “transgression.”

Employees have the most “insider information” about the inner workings of the company.  They have the best access to key company assets.  They know routines of other employees and support contractors.  They know passwords, security protocols, personal information, and have access to unique identifying data which can be used to impersonate other employees.  They know where they security cameras are situated and know which ones are ‘dummy cameras’. They know where cash and financial records are kept.  They can influence other employees, or even bribe other employees to take part in organized theft.  

Employees are in-tune to others in the organization, and can execute their plans when other employees are less alert, having a “bad day,” or when key senior team members are on holiday and not around to notice.

Personality factors that predict workplace theft are greed, low cognitive ability, limited self-control, and tolerant or conditional attitudes toward unethical behaviors.  For example, an employee might rationalize stealing $50 worth of company property because they feel underpaid and they ‘deserve’ more.  Alternatively, an employee at a very large international company might feel the company is too big to care or even notice the impact of a $25 item when the market cap of the company is in the billions.

Younger employees tend to be more susceptible to peer pressure and have a desire to fit in with others. They may conform to or adapt their attitudes towards dishonest behaviours, especially if they see their supervisors or managers bend the rules and commit theft themselves.

Also, if employees feel they are not being treated with respect and appreciation, they are more likely to commit theft - justification and rationalization because of the managers and executives are the ones making the big salaries while the front-line workers are the ones doing the ‘actual’ work for a fraction of the compensation.

Some Examples of Theft in the Workplace

• Cleaning persons remove company property along with trash.

• Stockpersons remove stock in their pockets while placing fresh stock on the shelves.

• Workers that regularly carry supplies and equipment from one place to another carry goods and materials to their cars.

• Employees intentionally damage merchandise, and then mark it out-of-stock, taking it home with them after-hours.

• Employees in large warehouses or distribution centres may organize with other employees and even outsiders to form a full scale crime ring.

• Shoplifting and then giving away merchandise to friends or family, and then later returning them for money, bypassing proper return paperwork and protocol.

• Restaurant workers and grocery store employees grazing on food or flat out stealing large quantities of expensive product, i.e. steaks or alcohol.

How to proactively prevent Workplace Theft

Everyone in the organization, from senior leadership to managers to supervisors to employees must all understand (both in theory but most importantly in organizational action) that workplace theft is harmful and is not tolerated.  

Organizations are recommended to have a 3-pronged approach to workplace theft when it is uncovered:  treating investigations without bias and giving everyone involved a fair opportunity, taking expedient serious action without delay, and the potential for severe consequences such as termination of employment or civil and even criminal prosecution.

Pre-employment screening is critical - this is where private investigators can really shine.  Organizations should seek employees with a history of strong work ethic, teamwork, and personal integrity.  Organizations should ensure their recruitment process conducts due diligence to filter out persons who are dishonest, argumentative, and have a poor work ethic.  

Private Investigators can help get to the truth when organizations undertake personal and professional reference checks, and employment and education verification.  Is HR really speaking to the right people? How are you sure you’re speaking with a credible reference, or just a friend asked to lie and pretend to be someone else?

Private investigators can perform in-depth background checks to investigate any criminal convictions or concerning financial & credit history, workers compensation & WSIB claims, social media records for unethical behaviour, and other personal integrity matters.

According to ASIS International, “researchers have found the following actions to be the most promising: screening applicants for employment; maintaining a positive and honest workplace environment; establishing controls; and taking consistent, but tough action against transgressors.” 

How can Private Investigators help when Workplace Theft is occurring? 

We recommend ‘going with your gut’. As a manager or supervisor, you know your employees and the workplace and often get a ‘feeling’ that something is not right.  If you suspect workplace theft is occurring, you will need to perform due diligence to confirm your suspicions.

The first step is to consult with a workplace investigator and/or with company counsel. Talking through your suspicions with a lawyer or investigator could help you determine if your suspicions are warranted.

If, after consulting with an investigation expert, you believe that internal theft is occurring then a formal investigation strategy must be followed. This may include installing cameras, planting ‘low hanging fruit’, and conducting an undercover investigation in the workplace.

Undercover Private Investigations in the Workplace

A private investigator can go undercover in a workplace follow the signs, develop evidence, and uncover theft.

There are times when an isolated incident turns out to be an entire theft rings. Theft rings are when employees operate within an organized group that regularly steal product, goods, and materials from a company. Often time they resell the stolen goods on Facebook Marketplace or Kijiji.

Private investigators can not only find out which employees are at the source of theft, but can also obtain evidence that can be used in court.  Investigator reports can be used to terminate employees involved in internal theft, used in civil lawsuits, and also in criminal actions against the thieves.

The work of a Private Investigator can yield the kind of evidence that employers need to satisfy Employment Standards laws and Ministry of Labour standards for fair and ethical treatment of employees when dealing with the costly element of workplace theft.

If your organization is suffering from workplace theft, see our additional resources and services here for Workplace and Corporate Investigations.