Exciting new research reveals that small business owners may feel hesitant to report employee theft, but there are solutions available.
As a business owner, there are many things that keep you up at night, but have you considered the impact of employee theft? It may not be top of mind, but it can have a serious negative impact on your company. Employee theft can damage the morale of your team and tarnish your brand reputation, resulting in a significant loss of revenue and profits.
The good news is that with the right tools and techniques, you can prevent employee theft and embezzlement. By developing a solid loss prevention strategy, you can protect your business and ensure that you stay ahead of the competition. Don’t let employee theft hold you back from achieving your goals – take action today to secure your business’s future.
Statistics Reveal a Different Picture
According to the study conducted and reports filed by the University of Cincinnati, research shows that 64% of employees steal from small businesses. In comparison, only 16% of employers report the theft to the police. There is certainly no denying the fact that cheating employees are ever-ready to steal from a company whenever they get the opportunity. Small businesses are more susceptible and vulnerable to employee theft and embezzlement.
One report finds that companies with fewer than 100 employees have a higher percentage of theft and embezzlement cases. A staggering 92% of theft cases testify that employees feel more inclined to steal from small companies. This is due to their freedom to handle essential business affairs like business management, bookkeeping, or accounting on their own. The University of Cincinnati’s research also found out why employers are reluctant to get the authorities involved. You may be surprised to know the reasons, including concerns about the criminal justice system and emotional ties.
What Makes Small Business Owners Hesitant to Report Theft?
There are reportedly four reasons employers feel reluctant to report employee theft to the police, and we will discuss those below.
No Real Victims
Business owners’ nature and approach significantly determine an employee’s fate in stealing from a company. Some owners are more concerned about recovering their losses than actually reporting the fraudulent activity. This category of people may even forgive their employees and give them another chance to prove their worth and loyalty. This is also when, in extreme cases, set a precedent and fire them after recovering their losses without reporting them to the authorities.
Many business owners do not see victimization as a serious offense to be prosecuted officially and causing troubles beyond firing the employee stealing from the company. They believe that there are many more things to worry about rather than this.
Attorney Advises Against It
The costs of prosecuting a perpetrator may be much more than what an employee stole from your company. Small businesses usually have scarce resources to deal with employee theft, which restricts them from prosecuting a court case.
However, in prosecuting a lawsuit for large companies and corporate-level frauds, $20,000 or more is advisable. Still, the slow restitution could take ages when you recoup the stolen funds. Therefore, many attorneys advise against reporting employee theft to law enforcement. Specifically, if the successful prosecution outweighs any likely benefits the employer intends to attain for their time and efforts.
Emotional Ties
Since trusted and seasoned employees often have a long work history and good reputations. However, they tend to steal more from a company than those who just joined the workforce. Because of this, business owners often forgive the convicted employee based on emotional ties and history. This is probably one of the most significant precincts faced by small business owners that prevents them from reporting a crime to the local authorities.
They See the Criminal Justice System as Ineffective
Small business owners are often reluctant to get involved with the police in complicated employee theft issues. The police will investigate the matter and may look for evidence of theft, including interaction with coworkers, that will create a negative vibe in the organization.
On the other hand, some business owners consider criminal justice proceedings as ineffective or incompetent. There have often been reported cases of law enforcement personnel caught taking bribes from perpetrators, which poses a question of the justice system’s credibility. So, small business owners bear themselves from the trial rather than getting involved in lengthy and complicated prosecution methods.
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