Most small businesses in the U.S. neglect reporting employee theft, a new report has found. According to a University of Cincinnati criminal justice study, 64 percent of small businesses have lost money to such internal issues. In the same survey, which gathered responses from a variety of small businesses with 100 or fewer employees across the country, respondents revealed that just 16 percent of small business owners reported any of these thefts to the police.<\/p>\n
“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, who carried out the survey. “After all, small businesses with 100 or fewer employees comprise 97% of all businesses in the United States.”<\/p>\n
The study investigated the root causes behind employee theft and found that those most likely to commit a crime against their employers are “those at the lowest hierarchical level.” The study revealed around 60 percent of thieves in question fall into this category, making them the highest risk employees when it comes to these misdeeds.<\/p>\n
These\u00a0transgressions are rarely one time events, either. According to the survey, most thefts are part of long term schemes in which the thieves steal small amounts of money over time. Small thefts can add up quickly, though – 40 percent of thefts that were recorded involved taking direct cash and, over months or years, these monetary thefts added up to around $20,000 over time.<\/p>\n
What remains in question, of course, is why small business owners would keep these events quiet. The study reported that business decision makers do not view the incidents as serious enough to warrant\u00a0thorough investigation. Instead, many entrepreneurs choose to fire the employee without involving the authorities.<\/p>\n
“For instance, one company went through all the time and steps for a successful prosecution of an employee who stole $200,000,” Kennedy said. “The employee was convicted, put on probation and ordered to make restitution at the rate of $50 per month. In essence, the small business will never recoup the stolen funds.”<\/p>\n