Employee theft shatters trust when good workers go bad: Hiscox

Employee theft can send an organization into turmoil, both financially and in terms of the trust businesses place in their workers, according to the 2016 Hiscox Embezzlement Study, which analyzed some of the reasons employees go bad and how companies can respond.

“Why do people steal from the hand that feeds them? The motivations of embezzlers are often different from those of other criminals. Perpetrators are often regular people who are smart, well-liked, and those you’d least expect to steal. How does a trusted employee turn into a criminal?” stated Hiscox in its report.

Hiscox identified a few of the warning signs of potential embezzlers. Some of them aren’t surprising – disgruntled workers, big spenders, and “egotistical risk-takers” might seem automatically suspicious. However, Hiscox also found that hard workers and “intelligent and inquisitive” workers who want to know all the ins and outs of the business can be suspects as well. Employees with the most access and controls of accounts and systems generally abscond with the most, the report noted, highlighting the fact that 40 percent of all employee-theft crimes are committed by individuals in the finance or accounting role.

The average loss from white-collar crime events was just over $807,000. Given that four out of five victim organizations had fewer than 100 employees and 82 percent of events studied affected businesses with fewer than 150 workers, that can be a significant sum. Twenty percent of losses involved over $1 million.

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