Few Small Business Owners Report Employee Theft to Police: Report
Most small businesses do not involve the police when they catch an employee stealing, new research finds.
Sixty-four percent of small businesses have experienced employee theft, but only 16 percent of those reported the incident to police, the study found. Overall, 40 percent of thefts in small businesses are of money, and cash thefts reported in the study range from $5 to $2 million, with $20,000 being the average amount stolen.
Eighteen percent of thefts were of products sold by the business, 12 percent were of materials, eight percent were of tools and six percent were equipment.
Sixty-one percent of reported thefts were ongoing schemes and ranged in duration from about two weeks to 20 years. The average duration before an employee was caught was 16 months.
Sixty percent of employees most likely to steal were categorized as general or first-line employees, 20 percent were managers or executives, and the rest were small percentages of accountancies, receptionists and billing professionals. Surprisingly only about two percent of cashiers were likely to steal.
Study author Jay Kennedy, a University of Cincinnati criminal justice doctoral student, found four main reasons why employers are hesitant to get law enforcement involved:
- No real victims: The business owner does not see the victimization as serious enough to warrant further action than firing the employee.
- Attorney advises against it: Business owners may seek counsel from a third party, who often advises that an employer’s costs in time and effort for a successful prosecution outweigh any likely benefits to the employer.
- Emotional ties: Many employees caught stealing have worked alongside the business owners for many years, or may be family members.
- Business owners see law enforcement and the criminal justice system as ineffective or incompetent: Thefts by employees may involve complex finances that are not a beat cop’s specialty, the report says. Small businesses often assume that the responding officer won’t have the background to appreciate or do much about a reported crime than write a report. Or, small business owners assume that police are busy with more traditional law enforcement duties.