In my last blog post, I talked about the rampant levels of employee theft afflicting the retail industry. Today, I’d like to talk about the causes of this financially crippling problem, examining the “who” and “why” of employee theft.
Retail Loss Prevention Strategies – PART II
The Who and Why of Employee Theft
Workers that steal from their employers fall into categories based on their motivations. There are four distinct types of theft profiles:
- Self-Gratification: the individual that enjoys stealing
- Entitlement: the employee that believes they are not being paid what they are worth
- Desperation: stealing due to financial problems, extreme debt, medical bills, family issues, or addictions, such as drugs and gambling
- Temptation: a worker that takes advantage of an easy opportunity to steal
Untrustworthy employees interested in self-gratification are occasionally hired. Not much can be done about avoiding this type of employee except to have a more stringent screening process before hiring. Most employees falling into the other theft profiles above have otherwise proven to be valuable workers.
A common attribute among these employees is a perception of inequitable treatment by their employers. They believe they are justified in augmenting their income by means of theft – they are righting a wrong. High staff turnover typical in retail operations and temporary, seasonal workers often have more loyalty to their friends and family than their employer. Perpetuating these attitudes and dishonest behaviors is one critical factor – the risk of getting caught is much lower than the rewards of stealing.
Statistics on Employee Theft Recovery
While awareness is on the rise, most employee theft is never detected or addressed. Dishonest employees apprehended for theft increased by almost 10 percent in 2016. Over $120 million was recovered, an increase of 2.5 percent from 2015. But for every $1 recovery made by the retailers in the study, $12.82 was still lost to due to stealing.
The result is that theft has become ingrained and ends up affecting the entire workplace culture – everyone is doing it and no one is getting caught. Employee theft has almost become an accepted worker entitlement.
Where to Go from Here
Apprehension is a never-ending game of cat and mouse and isn’t producing the needed results. Clearly the solution needs to focus on prevention, remove temptation and prevent theft in the first place. What’s more, removing the ability to steal holds the promise of changing employee behavior. Without the constant temptation of opportunistic theft, employees can concentrate on their jobs and the customer. Such a preventative approach holds employees accountable ultimately resulting in a stronger workplace culture.
In the next blog of this series, I’ll look at one of the most promising places to stop employee theft – at the POS terminal. Theft frequently happens during checkout at the POS terminal. I’ll examine how employees falsify transactions to benefit themselves or their friends and what can be done about it.
Statistics source: Jack L. Hayes International 29th Annual Retail Theft Survey
Chris Trytten has over two decades of technical and managerial experience in systems and security at leading companies in Silicon Valley, including positions with Crossmatch, DigitalPersona, Interlink Networks, Apple, Siemens and Amdahl. In his current position as Market Solutions Manager at Crossmatch, he is using his experience serving the Financial and Retail markets by guiding the product and market teams to address the security needs of these industries. Chris is the author of multiple security white papers and articles.