Workplace theft is costing billions


From employees pocketing the odd pen or stack of Post-It notes, to those creating their own slush funds. Workplace theft is becoming a huge financial issue.

“When I quit my job at Subway, I stole the bread scoring knife because I found it was perfect to open mail with,” one employee confessed to Whisper.

Stealing office supplies is a seemingly harmless act. In fact, sometimes it’s so harmless and strange you wonder why they bothered – employees have admitted to some odd thefts, from pocketing toilet paper and light bulbs, to sneaking the office Windex out by making it look like a bottle of water.

What’s the point? Perhaps it’s the thrill of the act, or an urgent need for cheap items? Then there are those who find themselves stealing things on the wilder end of the scale, like a baby pig on death row.

While stealing a pen (or an innocent baby pig) mightn’t seem like the biggest deal, this behaviour is costing Australian businesses up to $1.5 billion each year, according to Australian Federal Police statistics.

In 2018, retailers lost around $3 billion due to retail shrinkage and it’s thought that around $750 million of that figure was taken by employees.

The Association of Certified Fraud Examiners in America reported that “non-cash” property in the workplace jumped from 10.6 per cent of corporate-theft in 2002 to 21 per cent in 2018.

What’s causing the increase?

One report from The Atlantic suggests the increasing amount of employees working from home could be to blame.

It makes sense. With the 2016 census showing that 3.5 million Australians regularly work from home (and we can assume that number has only grown with more organisations implementing flexible work policies) they need to take some essential work items with them. And some of those items are never returned. If it’s a notepad, it might not seem like such a big deal, but your average Apple laptop sets you back around $1,300.

The Atlantic article also suggests there are specific times of year where an employee is more likely to give in to their thieving tendencies.

“The burn rate on tape spikes when holiday gifts need wrapping, and parents ransack the supply closet to avoid the back-to-school rush at Target. After a new Apple gadget is released, some workers report that their company-issued iPhone is broken — knowing that IT will furnish a replacement, no questions asked.”

An article from The Conversation suggests an even simpler reason; employees are after sweet, sweet revenge. The article’s author, assistant professor of Industrial and Organisational Psychology Yannick Griep of the University of Calgary, says that when an employer breaks a psychological contract with their employee – say they go back on their word regarding requested leave, or a salary bump – employees can be overcome with a sense to take what’s rightfully theirs.

“Employees who experience broken promises tend to experience a series of very intense negative emotions such as anger, frustration and outrage, which in turn will lead to a higher desire to dominate, retaliate and get even with the employer,” says Griep.

Interestingly, Griep says that it can be an employer’s best performing workers who are most likely to fall into this behaviour pattern, because those who are considered excellent at their job are more likely to expect to be treated fairly.

The snowball effect

In a paper titled ‘The Slippery Slope: How Small Ethical Transgressions Pave The Way For Larger Future Transgressions’, a team of researchers found when minor unethical acts at work are left unchecked they can easily snowball into much larger crimes.

“People rationalize their behavior to justify it,” says Lisa Ordóñez, one of the study’s authors. “They might think ‘No one got hurt,’ or ‘Everyone does it.’ The next time, they feel fine about doing something a little bit worse and then commit more severe unethical actions.”

The researchers tested this theory by giving subjects 25c for committing a minor unethical act. Later, the same subjects were given $2.50 for taking on a not-so-minor misdemeanour.

Separate subjects, who hadn’t committed the initial minor act for 25c, were less likely to involve themselves in a wrongdoing for $2.50, which supports the researchers’ theory that this behaviour builds upon itself.

Take the woman from Western Australia who was recently sentenced to six years in jail for stealing money from two small businesses.

She had carried out 389 fraudulent transactions over seven and a half years, amassing $1.2 million in total, to pay for bills and “to go out shopping, have coffee with friends and have nice things”. It’s possible when she stole the first sum of money, just one month into the job, that she didn’t foresee herself wracking up millions. However, once she realised she was able to get away with it and got a taste of the new life she could afford to live, she fell victim to the snowball effect.

What’s the fix?

Returning to Griep’s theory, with 55 per cent of employees reporting a broken promise from management within their first two years on the job, the lesson for employers is to remain trustworthy if you want to keep all of your pens.

While organisations should keep their eye on those high-performing employees, as per Griep’s article, they should also take special note of those who’ve been with the organisation for some time.

“Often, the person caught stealing from a retail business is one of the most trusted employees. This is where the high emotional cost kicks in. It is not uncommon for them to be a long-term employee who has the trust and respect of the business owners. Often, it has been a relative of the owner or at least someone treated as a relative or a member of the family,” says a spokesperson for Tower Blog.

So, what should employers be doing? Ordóñez and her team suggest the following:

  • Ensure that ethical misconduct is clearly defined.
  • Make ethical behaviour part of your organisation’s identity
  • Be vigilant about small ethical lapses and address them quickly. Employees who see coworkers called out for minor offenses might be less likely to rationalise their own potentially deviant behaviors.

But if you’re very lucky, you don’t need to do anything to punish workplace theft – it becomes its own punishment. As one anonymous employee told Whisper, “I stole some industrial glue from work to fix my glasses [and I] ended up gluing my fingers together”. That, my friend, is what they call karma.


Learn how to set clear expectations and improve employee performance with the Ignition Training course ‘Managing performance’.

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Adam
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Adam

Sure, working from home can lead to office supplies going home too, because the employee needs to be able to work…if you work from home are you expected to pay for your own office supplies, if those supplies would have been provided if you spent your time in the office? Doubtful.
Either way, I see how this can become an issue of scale.
Saying that, what kind of company is not keeping track of where all of their $1300 Apple laptops are?? Ridiculous!

Sharlene
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Sharlene

I worked at a company that had such a problem with this, they got a specialised stationery cabinet with keys that were not able to be copied, and staff had to fill a request form, to be approved by their supervisor, for admin to fill the “order” which was bagged and labelled, and signed for when collected. It was installed after one Jan that we constantly saw staff leaving with plastic shopping bags full of pens, highlighters, tape, etc clearly for their kids “back to school” supplies… *sigh*

Forth
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Forth

I see no mention of the unpaid time employees are expected to spend working, wage theft of various flavours, restructuring roles to become casual positions for “flexibility”, requirements for 6 or seven days per week availability and rosters less than two weeks in advance with no recompense for not being able to plan your life.. I could go on. If you want to reduce workplace theft, don’t treat your employees like aggregate overhead.

Phil
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Phil

“‘Everyone does it.’ The next time, they feel fine about doing something a little bit worse and then commit more severe unethical actions.” The researchers tested this theory by giving subjects 25c for committing a minor unethical act. Later, the same subjects were given $2.50 for taking on a not-so-minor misdemeanour. Subjects who done the minor act for 25c were less likely to involve themselves in the $2.50 wrongdoing,

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Workplace theft is costing billions


From employees pocketing the odd pen or stack of Post-It notes, to those creating their own slush funds. Workplace theft is becoming a huge financial issue.

“When I quit my job at Subway, I stole the bread scoring knife because I found it was perfect to open mail with,” one employee confessed to Whisper.

Stealing office supplies is a seemingly harmless act. In fact, sometimes it’s so harmless and strange you wonder why they bothered – employees have admitted to some odd thefts, from pocketing toilet paper and light bulbs, to sneaking the office Windex out by making it look like a bottle of water.

What’s the point? Perhaps it’s the thrill of the act, or an urgent need for cheap items? Then there are those who find themselves stealing things on the wilder end of the scale, like a baby pig on death row.

While stealing a pen (or an innocent baby pig) mightn’t seem like the biggest deal, this behaviour is costing Australian businesses up to $1.5 billion each year, according to Australian Federal Police statistics.

In 2018, retailers lost around $3 billion due to retail shrinkage and it’s thought that around $750 million of that figure was taken by employees.

The Association of Certified Fraud Examiners in America reported that “non-cash” property in the workplace jumped from 10.6 per cent of corporate-theft in 2002 to 21 per cent in 2018.

What’s causing the increase?

One report from The Atlantic suggests the increasing amount of employees working from home could be to blame.

It makes sense. With the 2016 census showing that 3.5 million Australians regularly work from home (and we can assume that number has only grown with more organisations implementing flexible work policies) they need to take some essential work items with them. And some of those items are never returned. If it’s a notepad, it might not seem like such a big deal, but your average Apple laptop sets you back around $1,300.

The Atlantic article also suggests there are specific times of year where an employee is more likely to give in to their thieving tendencies.

“The burn rate on tape spikes when holiday gifts need wrapping, and parents ransack the supply closet to avoid the back-to-school rush at Target. After a new Apple gadget is released, some workers report that their company-issued iPhone is broken — knowing that IT will furnish a replacement, no questions asked.”

An article from The Conversation suggests an even simpler reason; employees are after sweet, sweet revenge. The article’s author, assistant professor of Industrial and Organisational Psychology Yannick Griep of the University of Calgary, says that when an employer breaks a psychological contract with their employee – say they go back on their word regarding requested leave, or a salary bump – employees can be overcome with a sense to take what’s rightfully theirs.

“Employees who experience broken promises tend to experience a series of very intense negative emotions such as anger, frustration and outrage, which in turn will lead to a higher desire to dominate, retaliate and get even with the employer,” says Griep.

Interestingly, Griep says that it can be an employer’s best performing workers who are most likely to fall into this behaviour pattern, because those who are considered excellent at their job are more likely to expect to be treated fairly.

The snowball effect

In a paper titled ‘The Slippery Slope: How Small Ethical Transgressions Pave The Way For Larger Future Transgressions’, a team of researchers found when minor unethical acts at work are left unchecked they can easily snowball into much larger crimes.

“People rationalize their behavior to justify it,” says Lisa Ordóñez, one of the study’s authors. “They might think ‘No one got hurt,’ or ‘Everyone does it.’ The next time, they feel fine about doing something a little bit worse and then commit more severe unethical actions.”

The researchers tested this theory by giving subjects 25c for committing a minor unethical act. Later, the same subjects were given $2.50 for taking on a not-so-minor misdemeanour.

Separate subjects, who hadn’t committed the initial minor act for 25c, were less likely to involve themselves in a wrongdoing for $2.50, which supports the researchers’ theory that this behaviour builds upon itself.

Take the woman from Western Australia who was recently sentenced to six years in jail for stealing money from two small businesses.

She had carried out 389 fraudulent transactions over seven and a half years, amassing $1.2 million in total, to pay for bills and “to go out shopping, have coffee with friends and have nice things”. It’s possible when she stole the first sum of money, just one month into the job, that she didn’t foresee herself wracking up millions. However, once she realised she was able to get away with it and got a taste of the new life she could afford to live, she fell victim to the snowball effect.

What’s the fix?

Returning to Griep’s theory, with 55 per cent of employees reporting a broken promise from management within their first two years on the job, the lesson for employers is to remain trustworthy if you want to keep all of your pens.

While organisations should keep their eye on those high-performing employees, as per Griep’s article, they should also take special note of those who’ve been with the organisation for some time.

“Often, the person caught stealing from a retail business is one of the most trusted employees. This is where the high emotional cost kicks in. It is not uncommon for them to be a long-term employee who has the trust and respect of the business owners. Often, it has been a relative of the owner or at least someone treated as a relative or a member of the family,” says a spokesperson for Tower Blog.

So, what should employers be doing? Ordóñez and her team suggest the following:

  • Ensure that ethical misconduct is clearly defined.
  • Make ethical behaviour part of your organisation’s identity
  • Be vigilant about small ethical lapses and address them quickly. Employees who see coworkers called out for minor offenses might be less likely to rationalise their own potentially deviant behaviors.

But if you’re very lucky, you don’t need to do anything to punish workplace theft – it becomes its own punishment. As one anonymous employee told Whisper, “I stole some industrial glue from work to fix my glasses [and I] ended up gluing my fingers together”. That, my friend, is what they call karma.


Learn how to set clear expectations and improve employee performance with the Ignition Training course ‘Managing performance’.

7
Leave a reply

avatar
100000
  Subscribe to receive comments  
Notify me of
Adam
Guest
Adam

Sure, working from home can lead to office supplies going home too, because the employee needs to be able to work…if you work from home are you expected to pay for your own office supplies, if those supplies would have been provided if you spent your time in the office? Doubtful.
Either way, I see how this can become an issue of scale.
Saying that, what kind of company is not keeping track of where all of their $1300 Apple laptops are?? Ridiculous!

Sharlene
Guest
Sharlene

I worked at a company that had such a problem with this, they got a specialised stationery cabinet with keys that were not able to be copied, and staff had to fill a request form, to be approved by their supervisor, for admin to fill the “order” which was bagged and labelled, and signed for when collected. It was installed after one Jan that we constantly saw staff leaving with plastic shopping bags full of pens, highlighters, tape, etc clearly for their kids “back to school” supplies… *sigh*

Forth
Guest
Forth

I see no mention of the unpaid time employees are expected to spend working, wage theft of various flavours, restructuring roles to become casual positions for “flexibility”, requirements for 6 or seven days per week availability and rosters less than two weeks in advance with no recompense for not being able to plan your life.. I could go on. If you want to reduce workplace theft, don’t treat your employees like aggregate overhead.

Phil
Guest
Phil

“‘Everyone does it.’ The next time, they feel fine about doing something a little bit worse and then commit more severe unethical actions.” The researchers tested this theory by giving subjects 25c for committing a minor unethical act. Later, the same subjects were given $2.50 for taking on a not-so-minor misdemeanour. Subjects who done the minor act for 25c were less likely to involve themselves in the $2.50 wrongdoing,

Sorry, no posts matched your criteria.
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