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Tips for Preventing and Detecting Employee Theft in the Workplace
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Tips for Preventing and Detecting Employee Theft in the Workplace

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Timothy Dimoff shares tips for preventing and detecting employee theft in the workplace.

Timothy Dimoff shares tips for preventing and detecting employee theft in the workplace.

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  • 1. How to Detect and Prevent Employee Theft Timothy Dimoff, President, SACS Consulting
  • 2. Timothy Dimoff Timothy Dimoff, president of SACS Consulting & Investigative Services, Inc., is a speaker, trainer and author and a leading authority on high-risk workplace and human resource security and crime. He is a Certified Protection Professional, a certified legal expert in corporate security procedures and training, a member of the Ohio and International Narcotic Associations, the Ohio and National Societies for Human Resource Managers, and the American Society for Industrial Security. He holds a B.S. in Sociology, with an emphasis in criminology, from Denison University.
  • 3. Surprise! 79% of workers admit they have considered, or would consider, stealing from their employers. Kessler & Associates
  • 4. Cost of Theft One of every three companies that goes bankrupt each year does so as a result of employee theft… …costing businesses between $60 and $120 billion a year!
  • 5. Checks and Balances o Many employers overlook symptoms of theft, failing to put adequate checks and balances in place. o The cheating culture has created an atmosphere that dissuades “whistleblowers” from coming forward to expose this extremely pervasive practice.
  • 6. Collateral Damage Although workplace theft is probably somewhat more widespread among blue collar workers… …the damage done by more senior employees is usually far greater.
  • 7. Why Employees Steal o Greed 49% o Vindictiveness, get even 43% o Need 8% The real reason people steal is opportunity. When companies make it easy through lack of control, an atmosphere of theft is created.
  • 8. Who Will Steal? o 21% will never steal o 13% will steal o 66% will steal if they see others do so without consequences o 75% of employee-related crimes go unnoticed
  • 9. Myths and Misconceptions o Management doesn’t need to tell employees about policies on employee theft because they already know. o Well-paid employees are less likely to steal. o Honest and loyal employees will report other employees who steal.
  • 10. Facts & Reality o The opportunity to steal is more important than the need for money. o The majority of employee theft goes undetected by management. o Less than 10% of the employee population is responsible for more than 95% of the total losses from employee theft.
  • 11. Facts & Reality cont’d o Nearly every business experiences some degree of employee theft. o Nearly one-third of all bankruptcies is caused by employee theft.
  • 12. 3 Major Categories of Workplace Fraud 1. Asset Misappropriation: theft or misuse of an organization’s assets. (Represents 87% of losses) Examples: oTheft of inventory oSkimming revenues oPayroll fraud Cash is the targeted asset 90% of the time.
  • 13. 3 Major Categories of Workplace Fraud 2. Corruption: Perpetrators wrongfully use their influence in a business transaction to gain a benefit for themselves or another. Examples: oConflicts of interest oAccepting kickbacks
  • 14. 3. Fraudulent statements: Generally entail falsification of financial statements. Examples oOverstating revenues oUnderstating costs 3 Major Categories of Workplace Fraud
  • 15. How is Fraud Detected o Tip from an employee is the most frequent method of detection o Discovery by accident o Internal audit o Internal controls
  • 16. How to Stop Workplace Theft o Start by creating a great work environment. o Employees who like their job and feel they are fairly treated and compensated are less likely to steal. o Employees are more likely to steal when angered or treated unfairly. o Encourage a sense of ownership. o Reduce opportunities to steal.
  • 17. How to Stop Workplace Theft cont’d o Pre-employment screenings are an effective deterrent. o A security audit of your business operations helps employers identify and determine risks. o Initiate strict universal security guidelines. o Anonymous tip programs may compel honest employees to volunteer information about office theft without being labeled a snitch.
  • 18. When Theft is Suspected The three objectives of a fraud, theft, or embezzlement investigation: 1. Discover who was involved so the employee can be removed from the workplace. 2. Attempt to recover the money or lost property. 3. Prosecute the employee under applicable laws.
  • 19. Investigation Procedures o Quickly “shore up” confidentiality. o Identify employees (at every level) who had both access and opportunity to commit the act resulting in the loss. o Bring employees with access and opportunity into private area (individually) and ask them to write an account of their activities on the days and times relevant to the loss.
  • 20. Investigation Procedures cont’d o Quickly “shore up” confidentiality. o Identify employees (at every level) who had both access and opportunity to commit the act resulting in the loss. o Bring employees with access and opportunity into private area (individually) and ask them to write an account of their activities on the days and times relevant to the loss.
  • 21. Prevention: The Best Medicine “Employees steal to the extent management permits it… …there’s no shortcut to prevent it, you have to remove the opportunity, create awareness and achieve their support.”
  • 22. Resources www.sacsconsulting.co m Web Based Training Tools for Success IDENTITY THEFT
  • 23. Questions? Please submit your questions now
  • 24. Thank-you for participating If you have any questions, please feel free to email them to: Timothy Dimoff, President, SACS Consulting tadimoff@aol.com Joe Gerard, Vice President Marketing and Sales j.gerard@i-sight.com