Workplace crime costs businesses $50 billion a year

A 2017 study by Hiscox, a global specialist insurer, found that U.S. businesses affected by employee theft lost an average of $1.13 million in 2016. According to Statistic Brain, it’s a crime that costs U.S. businesses $50 billion each year.

Small and midsize businesses were hit disproportionately, representing 68% of the cases. Shockingly, 22% of cases were related to nonprofit organizations.

The researchers studied publicly available data on nearly 400 U.S. federal court cases in which employee fraud was alleged that either became publicly known or were active in the federal system during 2016. Funds theft was the most common embezzlement scheme, showing up in more than one third of all cases.

According to Hiscox, one factor that makes embezzlement challenging for small businesses is that employees who steal tend to be those who are the most trusted. So, they looked at several key warning signs. Thieves tend to share these characteristics:

• Intelligent and Curious
• Extravagant
• Egotistical Risk-taker
• Diligent and Ambitious
• Disgruntled

They also share some specific advice on what to look out for: “Keep an eye out for a few things. For instance, embezzlers might ask you how the office operates. This type of individual usually picks up tasks quickly and will use what he or she learns to steal from the company.

Employees who embezzle often live extravagantly. If someone who works for you is obviously enjoying a lifestyle beyond what his or her salary can bear, then take a closer look at this person’s work activities.

People who take risks in other areas of their lives may be inclined to take them at work as well, so if you hear an employee brag about a speeding ticket or an illegal base jump, then pay attention to this person when he or she is at work.

Especially unhappy employees may be more likely to steal from you, but you should also be aware of people who are notably ambitious. Someone who is embezzling from you may come into the office early and stay longer than you expect. This person may even give up vacations to gain your appreciation and trust, allowing him or her to avoid detection.”

As the most common crime that occurs in the business world, embezzling is something that all companies must be ready to handle. Preparation is critical: know what to look for and have a process in place for how you’ll handle such scenarios. Read the full study here.