80+ Shocking Employee Theft Statistics (2024)

Employee theft isn’t just a financial issue; it can erode trust and damage company morale.  These employee theft statistics highlight the prevalence of workplace theft across key categories including data theft, time theft, fraud and embezzlement, insider threats, and retail theft.

Prevent Employee Data Theft With CurrentWare

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Don’t wait for a disaster to strike. CurrentWare offers a comprehensive data security solution to safeguard sensitive information against insider threats.

Reach out to our team today to learn how to prevent employee data theft before it’s too late.

Further Reading:

• Cybersecurity Statistics
• Internet Usage Statistics
• Employee Monitoring Statistics
• Worst Examples of Data Theft by Employees
• Time Theft—Are Your Employees Stealing Time at Work?
• How to Prevent Data Theft by Employees
• Employee Offboarding: How to Keep Data Safe During a Termination

1) 57% of information security leaders and 51% of business decision-makers say that their colleagues have infiltrated data, which puts their current organization at risk of lawsuits and reputational damage.

Source: Data Exposure Report 2019, Code42

Over half of information security leaders and business decision-makers report colleagues infiltrating data. This highlights a significant insider threat risk, potentially leading to lawsuits and reputational damage for organizations.

2) Eight in ten (80%) cybersecurity leaders admit that departing employees take valuable IP with them when they leave.

Source: Data Exposure Report 2024, Code42

A staggering 80% of cybersecurity leaders say departing employees take valuable intellectual property.  This emphasizes the need for robust data security measures and potential restrictions on employee access during departure.

3) An average of 55% of insider-driven data exposure, loss, leak, and theft events experienced in the last 12 months were intentional

Source: Data Exposure Report 2024, Code42

A concerning 55% of data breaches are intentional acts by insiders. This points to the importance of mitigating disgruntled employee situations and fostering a culture of data security awareness.

4) Approximately 2 in 3 embezzlement schemes were discovered by a fellow employee

Source: 2018 Hiscox Embezzlement Study

Two-thirds of embezzlement schemes are discovered by other employees. This highlights the importance of encouraging employees to report suspicious activity and having clear channels for reporting concerns.

5) 57% of fraud is committed by company insiders or a combination of insiders and outsiders

Source: PwC’s Global Economic Crime and Fraud Survey 2020

Over half of all fraud is committed by insiders or a combination of insiders and outsiders. This emphasizes the need for robust internal controls and background checks  to deter and detect fraudulent activity.

6) Management makes up the largest portion of employees who commit fraud; 39% of fraud is committed by managers, leading to a median loss of $125,000. 37% of fraud is committed by employees, leading to a median loss of $50,000. Owners and executives make up only 23% of fraud cases, but cause $337,000 in median losses.

Source: Occupational Fraud 2022: A Report to the Nations | Association of Certified Fraud Examiners (ACFE)

Managers are the largest group committing fraud, causing significant median losses. This calls for increased scrutiny over managerial activities and implementing strong ethical codes within leadership.

7) Examples of time theft detected by monitoring software include absences from workstations (60%) and working a second job (52%).

Source: 60% of Employers Require Monitoring Software for WFH Workers, Digital.com

Monitoring software helps detect time theft activities like workstation absence and working a second job by capturing evidence of time theft such as extended breaks, excessive non-work web browning, and unreported absenteeism. 

8) 76% of loss prevention professionals have indicated that cyber-related incidents have become more of a priority for their organization in the last 5 years. 53% of them have placed a greater priority on internal theft.

Source: 2021 Retail Security Survey | National Retail Federation

Loss prevention professionals prioritize both cyber threats and internal theft. This reflects the evolving security landscape where both external and internal threats require attention.

9) Large retailers apprehend 361 dishonest employees per year on average

Source: 2021 Retail Security Survey | National Retail Federation

Large retailers apprehend a substantial number of dishonest employees annually. This highlights the need for effective loss prevention strategies and employee training programs.

10) 75% of employees admit to stealing at least once from their employer

Source: California Restaurant Association

A surprising 75% of  employees admit to stealing at least once.  This statistic underscores the importance of preventative measures and a culture of honesty within organizations.

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Case Study
Viking Yachts Stops an Employee From Stealing Their Intellectual Property

As Viking Yachts grew, their network administrator Vincent Pecoreno was responsible for supporting over 530 users and 1500 devices across multiple geographic locations, making visibility a challenge without the right tools in place.

Once equipped with CurrentWare’s user activity monitoring and data loss prevention solutions, Viking Yachts had the insights they needed to protect their sensitive data.

Read their case study to learn more about how Vincent used CurrentWare to detect a data theft attempt from a soon-to-be-ex-employee.

Read the Case Study

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Methods for Identifying and Mitigating Insider Theft

While no employer wants to think a member of their team is stealing, the United States Department of Justice estimates that up to 80% of employees will participate in fraudulent behavior if there are no preventive measures in place. 

Studies show that despite being victimized, most businesses fail to implement protective measures against insider data theft. However, with the right policies and tools, you can significantly reduce or eliminate insider threats. 

Fortunately, there are actionable steps that can be taken to identify potential insider threats before they can cause significant harm.

#1. Conduct Background Checks

52% of the organizations ran background checks, while 48% did not. Of the organizations that did run a check before hiring the perpetrator, 10% were alerted to a red flag regarding the perpetrator but chose to hire the person anyway

While thorough background checks may not be necessary for all positions, verifying the identity, history, and other important information about a potential employee is a valuable employee theft prevention tactic for positions where employees need to be trusted with sensitive information and other critical assets.

Background checks act as a shield against employee theft in a couple of key ways:

• Red Flag Detection: By looking into a candidate’s criminal history, you can identify past convictions for theft, fraud, or embezzlement. This gives you a strong reason to be cautious about hiring that person, especially for positions that involve access to money or valuables.
• Deterrence: The very act of conducting background checks sends a message to potential hires that your company takes honesty and security seriously. This will help to deter potential employees with a history of theft from applying for jobs at your company. 

If you opt for background checks, inform your applicants that they are a prerequisite for employment and define the scope of your checks, such as whether or not you conduct national and local background searches and social security number traces.

To make background checks more cost effective, use a reputable agency and reserve background checks for applicants who have gone far enough in the hiring process to be considered a serious candidate. 

NOTE: Before conducting background checks you must verify the correct processes with your legal counsel to ensure you are in compliance with any applicable laws and regulations. For example, if background checks are legal in your jurisdiction you will still likely be required to obtain written consent from the applicant before proceeding with the checks.

#2. Theft Prevention Policies & Procedures

Nearly 50% of recorded fraud cases stem from a lack of internal controls and/or the override of internal controls.

Have policies on hand that disclose surveillance and inspection practices that assist with insider threat detection. You should also have policies that clearly define the consequences of violating those policies, whether it be a performance improvement plan, immediate termination, or legal pursuits for restitution. 

There are a variety of policies that help deter employee theft, such as:

• Data security & acceptable use policies: Clearly define how sensitive data and the systems that interact with them must be handled to ensure the confidentiality, integrity, and availability of that data.
• Cybersecurity audits: Proactive security audits help ensure that your organization is fulfilling its security responsibilities by identifying unmitigated vulnerabilities and defining your current security practices
• Employee surveillance policy: If you conduct any sort of employee monitoring such as installing security cameras or monitoring employee computer activity, you must disclose your monitoring practices in a workplace monitoring policy.
• Employee handbook: Your employee handbook should outline the company’s policies on theft, including what constitutes theft, the disciplinary actions that will be taken for theft, and the company’s procedures for investigating suspected theft.
• Cash handling procedures: Establish clear procedures for handling cash, such as requiring two employees to be present whenever cash is being counted or deposited.
• Inventory control procedures: Implement inventory control procedures to track inventory levels and identify any discrepancies.
• Purchase order approvals: Require purchase orders to be approved by a supervisor before they can be placed.
• Expense report approvals: Require expense reports to be approved by a supervisor before they can be reimbursed.
• Disciplinary action for theft: Have a clear policy in place for disciplining employees who are caught stealing, which may include termination of employment.
• Anonymous reporting hotline: Approximately 2 in 3 embezzlement schemes in 2018 were discovered by a fellow employee. Providing an anonymous reporting hotline for employees to report suspected theft is a valuable tool that employees can use to report insider theft without fear of retaliation.

#3. Install Security Equipment & Insider Threat Detection Software

Install cameras not only in high customer traffic areas but also in areas employees frequently pass and where there may be unsecured cash or valuable items. Privacy laws may prevent recording inside break rooms, but in most jurisdictions you are free to monitor halls, back doors, stock rooms, dumpster areas, and janitorial areas.

Regularly inspect parking lots and secluded locations for anything out of the ordinary, like anomalous parked cars or damaged equipment.

Unfortunately, security cameras may be insufficient in deterring insider data theft as the breach may appear like a normal working day from the perspective of a camera.

As part of your workplace surveillance strategy you also need to have insider threat detection software in place that will detect and block high-risk activities such as attempts to use unsanctioned cloud storage services, uploading/downloading sensitive files, and inserting personal USB storage devices into computer systems with access to sensitive information.

#4. Perform Regular Security Audits

Internal audits are essential for ensuring that your organization is fulfilling its security responsibilities. According to the team at backgroundcheckrepair.org, management staff is responsible for 39% of insider theft, while owners and executives have accounted for 23% of all theft instances.

Your audits will help you verify that you have adequate security controls to combat a variety of threat vectors, including:

• Social engineering attacks
• Credential theft
• Physical security measures
• Inventory management and asset tracking protocols
• Unmitigated physical and digital vulnerabilities
• Overprivileged data access
• Misconfigurations of software, system security policies, etc
• Ineffective or poorly enforced employee training
• A lack of insider threat detection capabilities

What elements you include in your security audit will depend on the assets you’re responsible for protecting, the resources you have available, and regulatory compliance requirements.

#5. Look For Employee Red Flags 

As a part of your insider theft prevention strategy you will need to be on the lookout for motivators and indicators on an insider threat such as workplace grievances, financial difficulties, an abnormal interest in taking on responsibilities above their security clearance, and arriving early and staying late without a clear need to do so.

By being aware of these red flags and having a plan in place, businesses can take steps to mitigate the risk of insider threats.

Behavioral Red Flags:

• Disgruntled Employees: Employees who are facing disciplinary action, layoffs, or other negative situations might be more likely to become insider threats. Watch for sudden changes in attitude, increased negativity, or expressions of revenge.
• Financial Problems: Employees experiencing unexpected financial strain could be tempted to steal or sell company information for personal gain.
• Isolation or Secrecy: Employees who become unusually withdrawn or secretive, particularly around company data or access points, could be a cause for concern.
• Sudden Schedule Changes: Employees requesting unusual schedule changes, especially increased access outside of regular work hours, might be trying to avoid detection while stealing data.

Access and Data Red Flags:

• Excessive Data Downloads: Employees downloading large amounts of sensitive data, especially to personal devices or external storage, could be a sign of potential theft.
• Frequent Accessing Unauthorized Data: Employees regularly accessing data outside their designated permissions or need-to-know basis might be looking for information to exploit.
• Bypassing Security Protocols: Employees attempting to bypass security measures like firewalls or password restrictions could be indicative of malicious intent.
• Sharing Confidential Information: Employees discussing confidential information outside of authorized channels, like unsecured networks or with unauthorized individuals, is a red flag.

It’s important to remember that these red flags don’t necessarily mean an employee is a definite threat.  However, if you notice any of these behaviors, it’s crucial to investigate further and consider reporting them to your organization’s security team.

What To Do If You Uncover Employee Theft

Uncovering employee theft can be a stressful situation. Here’s a roadmap to navigate it effectively:

1. Secure Evidence:  The first priority is to solidify your case. Gather any concrete evidence that proves the theft. This could include witness statements, security footage, financial records, or internal system logs.
2. Involve Management:  Don’t confront the employee yourself.  Bring the matter to the attention of your supervisor or HR department.  They are trained professionals who can handle the situation with more experience and objectivity.
3. Employee Investigation:  HR will likely conduct a formal investigation to gather all the facts. This may involve interviewing the employee and allowing them to explain their actions.
4. Legal Considerations:  Depending on the severity of the theft, legal action might be necessary. Consulting with a lawyer can help determine the best course of action,  whether it’s involving law enforcement or pursuing civil remedies.
5. Disciplinary Action:  Following the investigation,  appropriate disciplinary action will be taken against the employee. This could range from a warning to termination,  depending on the severity of the theft and the employee’s record.
6. Preventative Measures:  Use this incident as an opportunity to review and strengthen your internal controls to prevent future thefts. This could involve areas like access control,  cash handling procedures, or inventory management.

Here are some additional tips:

• Maintain Confidentiality: Throughout the process, maintain confidentiality to avoid unnecessary rumors or accusations within the company.
• Documentation: Document everything throughout the process, including the date the theft was discovered, the evidence gathered, and the actions taken.

Remember, the most important thing is to handle the situation calmly, collect evidence, and involve the appropriate people to ensure a fair and legal resolution.

Learn More: Steps When Dealing with Employee Theft

Frequently Asked Questions About Employee Theft

How common is employee time theft?

• In 2011 the American Society of Employers estimated that 20% of every dollar earned by a U.S. company is lost to time theft at work.
• The American Payroll Association reported in 2017 that buddy punching costs employers $373 million annually.
• A 2017 survey conducted by PollFish found that 16% of US workers aged 18+ admitted to participating in buddy punching and time clock fraud.
• The International Data Corporation estimates that 30 to 40 percent of employee internet activity is non-work-related. This misuse of the internet in the workplace is costing US businesses $63 billion in lost productivity each year, according to Websense Inc.

What are the types of employee theft? What is the most common form of employee theft?

Employee theft is when an employee steals from the employer, but it includes more than just stealing cash or office items. Misuse of company assets without permission or stealing sensitive information are also instances of employee theft. 

Here’s a breakdown of the most common types:

Theft of Physical Assets:

• Merchandise Theft: Employees stealing company products for personal use or resale is a frequent issue, especially in retail environments.
• Cash Theft: This involves stealing cash from registers, safes, or petty cash drawers. Techniques include skimming (taking cash without recording the sale), under-ringing (charging a customer less than the actual price), or shortchanging (giving a customer less change than due).
• Inventory Theft: Employees stealing from stockrooms or warehouses can significantly impact a company’s bottom line.

Theft of Intangible Assets:

• Data Theft: This involves stealing or copying sensitive company data like trade secrets, customer information, or financial records. This can be done electronically or through physical means like stealing documents.
• Time Theft: Employees who misuse company time for personal errands, browse the internet excessively, or take extended breaks are essentially stealing paid time.
• Fraudulent Schemes: This involves employees manipulating company records or processes for personal gain. Examples include expense report padding or payroll timesheet falsification.

Most Common Form of Employee Theft:

While statistics can vary depending on the industry, time theft is generally considered the most prevalent form of employee theft. This is because it’s often easier to conceal compared to stealing physical assets or data. Studies suggest a significant portion of employee hours might be lost due to time theft activities.

However, it’s important to remember that the impact of different theft types can vary. Data theft, for instance, might not involve stealing a physical item but can have severe consequences for a company’s security and reputation.

By understanding these different forms of employee theft, businesses can implement preventative measures to mitigate losses and protect their assets.

What percentage of loss is attributed to employee theft? (what percentage of shrink is caused by employees?)

The percentage of loss attributed to employee theft can vary significantly depending on the industry, the size of the company, and various other factors. However, studies have shown that employee theft can account for a substantial portion of overall business losses.

According to the National Retail Federation’s 2023 National Retail Security Survey, the average shrink rate in FY 2022 increased to 1.6%, up from 1.4% in FY 2021 and in line with shrink rates seen in 2020 and 2019.

It’s important to note that these figures can vary from year to year and across different sectors. Additionally, not all instances of employee theft may be detected or reported, so the actual percentage of loss attributed to this issue could be higher than what is officially recorded.

Conclusion

These employee theft statistics paint a concerning picture, but knowledge is power. By understanding the different types of employee theft and the potential red flags, you can take proactive steps to safeguard your business. 

Implement preventative measures like clear policies, access controls, and employee training programs. Remember, a vigilant and secure work environment can deter potential theft and protect your company’s valuable assets.