Some readers may remember the Johnny Cash song, ‘One piece at a time’ which chronicled the tale of two US car workers who couldn’t afford the Cadillacs they worked on so decided to steal the bits to make their own – 24 years later the song tells us, they finished.
In the time and attendance business we talk a lot about time theft but at Chronologic we also offer access and security solutions which can help to deter other types of theft too.
Theft by employees in the UK is said to account for 42.7% of inventory shrinkage, and in retail alone the Global Retail Theft Barometer reckons retailers lose at least £2 billion a year to employee theft.
Whilst retail may be the biggest victim financially, theft can be a problem across the board, although government statistics show manufacturers generally experience less employee theft.
Defining theft in the workplace
At least 25% of employees have admitted to theft of physical items from their workplace, mostly it’s using the photocopier, taking pens and paper etc. Although some admitted to taking larger items such as mobile phones and computers. It all adds up in terms of cost to a business.
Martin Goodwill in an article in HR magazine estimated the cost:
Time theft, for example personal internet use, excessive tea/cigarette/lunch breaks
plus the theft of small items:
“If you have 50 employees, each earning around £12,000 per year and each of them:
– Has a daily half-hour of non-productive ‘theft’ time.
– Makes a weekly personal phone call
– ‘Borrows’ 1 A4 pad, 1 ballpoint pen, 1 post-it pad, 1 highlighter, 1 box of paperclips per year
– Makes 50 personal photocopies and franks five personal letters per year.
These ‘small’ transgressions will cost your business £35,000.
Work carried out at a Midwestern electronics factory by Horning (1970) is much referenced. He discovered that employees had developed a code of acceptable and unacceptable theft from work.
- Expensive tools or items and the purloining of which might compromise production if stolen were off limits.
- Smaller less expensive or plentiful items including nails, screws, and bolts were considered fair game.
- Property with no clear ownership such as tools replaced by newer equipment, waste materials and broken kit was also deemed fair game.
- However personal property, should not under any circumstance be stolen.
Theft can also be a cause stress and resentment in the workplace if more honest employees know what’s going on but don’t feel they can speak out, but see the perpetrators getting away with it.
Advice from the experts is that companies should have a clear and consistent policy on theft and take positive legal action against persistent or extreme offenders which in turn acts as a deterrent to others.
Banks take action on identity theft
And it’s not just the theft of physical items, the theft of customer information for fraudulent purposes has also been highlighted.
A recent CIFAS/ CIPD report noted organisations where staff fraud poses a significant threat are likely to consider introducing stringent controls and tough anti-staff-fraud measures in high-risk areas. For example, in the call centres of some UK banks they’ve introduced:
- Bans on personal mobile phones.
- Restricted access to email facilities.
- Paperless environments.
- Lockers for personal belongings.
- Regular spot checks on bags when staff leave the building.
- The arrest of staff at their desk and in front of other employees when suspected and investigated for fraud.
- ‘Naming and shaming’ in cases where the individual has been convicted and this is a record of public knowledge.
Although the authors go on to note that other industries probably don’t need to be so draconian in their approach.
Each industry can employ specific deterrents to employee theft, for example in retail random and regular ad hoc stock audits are said to reduce theft.
There are some simple and inexpensive deterrents we can help you put in place.
- A very public and visual deterrent is a search selector or randomiser. Each employee leaving a site has to punch a button, a light comes on which either shows green or red. Red means they’ve been selected for a random search. The selection process is completely random based on a percentage set.
- Restricting access is another way to cut down on the opportunity for theft (and fraud). Time and attendance systems can work with swipe card access control units on doors for example to ensure only designated staff are allowed access.
- CCTV can also act as a deterrent as well as capturing ‘on record’ that the correct procedures were employed during a random search for example should an employee lodge a complaint. Or provide further security in restricted access areas.
Tackling staff fraud and dishonesty CIFAS / CIPD 2012
Advice from Solicitors Withy King on dealing with theft in the workplace
HR Magazine: The impact of workplace fraud and theft on UK Business, Martin Goodwill
Lawyers Taylor Wessing – CCTV usage in the workplace in the UK