Today, many small business owners are trying to protect and improve their bottom lines in a number of different ways. However, recent data suggests that they are still reticent to safeguard themselves from loss in at least one aspect: When their own workers steal from them.
Today, 64 percent of small business owners say their companies have experienced some amount of employee theft in the past, but only 16 percent have actually taken the time to report those workers to local law enforcement, according to a new study by the University of Cincinnati’s criminal justice department. Of those companies polled, more than 90 percent had fewer than 100 employees, indicating that this may be a particularly large problem for small businesses which already operate on relatively thin margins.
“It’s important to look at this topic because such theft represents a loss to the tax base and would also seem to put such businesses at risk, and so, put our overall economy at risk,” said Jay Kennedy, a doctoral student who conducted the research. “After all, small businesses with 100 or fewer employees comprise 97 percent of all businesses in the United States.”
A deeper look at the numbers
When it comes to the kinds of things these thieving employees steal, just 40 percent is actual cash – though this was by far the biggest single type of thing stolen – with companies reporting as little as $5 going missing, and as much as $2 million, the report said. However, the average amount companies that experienced cash theft reported as having gone missing (likely skewed upward by that $2 million mark) was $20,000. Another 18 percent of thefts involved products made by the company, and 12 percent were for materials related to the making of those products. Other thefts involved tools (8 percent) and equipment (6 percent). Still more involved the theft of office supplies, fuel, or improperly manipulating timecards.
Interestingly, about 61 percent of theft cited by these companies say that it took place over a long period of time, ranging from two weeks to 20 years in the survey, the report said. The average length of time such a scheme went on before being discovered, though, was 16 months.
Owners worried about these or other financial issues might want to do more to shore up their bottom lines, such as finding more affordable small business insurance. Cutting costs for liability insurance or other types of policies can save companies thousands per year.