Employee Theft Statistics for 2021 and Beyond

 Employees are one of your organization’s most valuable assets. However, their dishonesty can be costly. Everything from scrolling social media during a meeting to sharing confidential documents with an outside source can be considered workplace theft. While some cases are more serious than others, if you are leading an organization, it’s important to stay up to date on current trends. Internal theft can have a major impact on your entire operation, as it is estimated to cost U.S. businesses up to $50 billion a year. From fraud cases to data security, we are covering the common types backed by statistics and trends for 2021 and beyond.

INTERNAL THEFT STATISTICS

• 75% employees have stolen at least once from their employer. (Source)
• More than 30% of business bankruptcies are due to employee theft. (Source)
• 90% of all significant theft losses come from employees. (Source)
• 40% of all employees who steal from their work have experienced HR red flags prior. (Source)
• 60% of employees would steal if they knew they wouldn’t get caught. (Source)

TOP INDUSTRIES FOR EMPLOYEE THEFT

• The three top sectors where insider attacks occur are finance, insurance, and healthcare. (Source)
• Finance and insurance have the highest number of perpetrators who are business partners, followed by healthcare and information technology. (Source)
• 84% of incidents in healthcare occur because the perpetrator is looking for financial gain. (Source)
• 27% of employee fraud occurs in government, healthcare, construction, and service industries, while 23% of employee fraud occurs in finance, technology, and other sectors. (Source)

COST OF EMPLOYEE THEFT

• Every year, business lose up to $50 billion as a result of employee theft. (Source)
• Employee theft costs are rising at a rate of 15% per year. (Source)
• Cash, property, or merchandise are targets for employee theft. (Source)
• People estimate U.S. companies lose 20% of every dollar to workplace fraud. (Source)

EMPLOYEE FRAUD AND EMBEZZLEMENT STATISTICS

• Fraud causes companies to lose an estimated 5% of revenue every year. (Source)
• The average fraud case costs a company $1,509,000. (Source)
• Fraud cases most commonly occur in these four areas: operations, accounting, executive and upper management, or sales. (Source)
• Billing and payroll fraud occurs at twice the rate in small business compared to large companies. (Source)
• 85% of embezzlement cases are perpetrated by a manager, with one-fifth of cases by a C-level executive. (Source)
• 79% of cases involved more than one person who committed the crime. (Source)

CYBER AND DATA THEFT STATISTICS

• Insiders are involved in 57% of data breaches. (Source)
• 20% of cyber incidents are caused by a misuse of privileges. (Source)
• Healthcare, information technology, and financial services are the top three sectors where insider breaches occur. (Source)
• Employee or contractor negligence causes 63% of attacks. (Source)

TIPS FOR PREVENTING THEFT FROM EMPLOYEES

While the statistics above may have you locking every door and file cabinet in your office, the best defense against employee theft is proactiveness. There are plenty of measures your organization can put in place to prevent theft.

• Verify Past Employment In the recruitment process, make sure to conduct a thorough background check for all potential hires. When doing so, contact all references, ask why the candidate left past jobs, and conduct a criminal search.
• Provide Clear Policies Make sure all employees know that there will be strict consequences for anyone who commits a crime. Write it on paper and have employees sign it so they know exactly what will happen if they choose to steal from the organization.
• Conduct Random Audits Carry out impromptu audits where you verify bank statements, ledgers for accounts payable and accounts receivable and any checks issued. Consider hiring an outside party who can do the work for you and bring any unbiased suspicious activity to your attention.
• Set Up a System of Checks and Balances For employees that manage financial accounts, establish a checks and balances system so no one person oversees all financial records. At least two employees should be always working together when dealing with sensitive information. 

While no employer likes to think of its own employees as potential sources of theft or crime, it’s important to make sure your organization is protected in any scenario. Employee theft and fraud are common occurrences, especially for small organizations. Securing the right Employee Theft Coverage can help safeguard your organization from financial losses related to employee dishonesty. To review your coverage options to ensure your mission is protected, contact us to speak with one of our specialized brokers.

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4 Steps in Preventing Gender Discrimination in the Workplace

Regardless of the progress that has been made over the years concerning gender equality in the workplace, most studies on the topic show that businesses and organizations still have a long way to go. According to a recent survey performed by the Pew Research Center, 42% of women in the United States claim that they have experienced some type of gender discrimination in the workplace, which can be an issue throughout the entire employment process, from the job interview to the exit interview or retirement.

The most common examples of gender discrimination in today’s workplace include failure to promote, unfair treatment, pregnancy discrimination, and receiving less support based on one’s gender – all of which are illegal and offensive,  much like any other type of discrimination, based on race, ethnicity, sexual orientation, religion, or age.

STEPS TO PREVENT GENDER DISCRIMINATION IN YOUR ORGANIZATION

The most effective way to keep your employees motivated to learn new things and grow with the organization is by making them feel safe and appreciated. A discrimination-free workplace is vital to achieving this goal. Here are a few steps organizations can take to ensure gender discrimination cannot and will not thrive in the workplace:

1.      ENHANCE TRANSPARENCY

Make the hiring and evaluation processes as transparent as possible by clearly identifying key milestones workers need to reach in order to qualify for senior-level positions. This is a great way to ensure your employees get promotions or pay raises solely based on their hard work and dedication.

2.      FAMILY-FRIENDLY INSURANCE PLANS

Build an honest, safe, and friendly environment for all parents, fathers included. Paid maternal leave as part of your family-friendly benefits package is great, but proper parental leave for both mothers and fathers is even better. Furthermore, covering your employees’ pregnancy-related health insurance is also a benefit that can make your organization very attractive to top talent.

3.      IMPLEMENT TRAINING

Sensitivity training will help organizations avoid complications and gender-based harassment or violence, as well as the lawsuits that can stem from these issues. Additionally, it’s imperative for your team to feel comfortable voicing their concerns and coming to executive leadership when looking for a solution. This kind of trust that is built in your organization will empower employees to be better at cooperating, communication, and performing their everyday tasks.

4.      ENFORCE ZERO-TOLERANCE POLICIES

The most effective way to prevent potentially hostile work environments, and lawsuits, is to draw clear lines and identify what types of behaviors that won’t be tolerated, regardless of the scenario. However, even if your organization takes legitimate steps towards preventing gender discrimination, it only takes one such incident to tarnish an organizations reputation and possibly lead to a very expensive lawsuit.

INSURANCE AS PROTECTION

Should your employees feel discriminated against and decide to bring a lawsuit, the legal expenses and reputational damage can be severe. Having the proper risk management program in place is critical in protecting against these possible expenses and damages, while business insurance allows the organization to transfer the financial stress and damage to a third party, the insurer. Having insurance that covers the financial aspect of such an undesirable situation allows your organization to deal with these types of allegations in a proper manner, with full attention for the employee’s dignity and safety.

In the event of a gender discrimination claim, the insurance policies that typically respond to these types of incidents would be either Employment Practices Liability Insurance (EPLI), or Directors and Officers Insurance (D&O). EPLI will respond to any employment claim, such as wrongful termination, failure to promote, or harassment based on an employee’s gender. The policy can cover both the legal costs to defend as well as settlements reached, or any fines imposed.

However, it’s not just the organization that is at risk for claims regarding gender discrimination. If employees who allege gender discrimination are not content with the way executive management responded to them, they make look to sue the organization’s officers personally. In such cases, EPLI will not protect the executives and board members of your organization. Having a D&O policy in place will help protect the personal assets of directors and officers and pay for both defense costs and damages that arise from such claims.

WHERE TO GO FROM HERE

The team at Hawley and Associates has a niche understanding on how to protect nonprofit and social service organizations from gender discrimination claims and other employment-related incidents. Our team will work alongside you to obtain the right coverage at the right price. Contact us to learn how we can better support your mission.