The Impact of Employee Theft

There are many different ways in which a company can be impacted by employee theft, and they can affect more than just staff and store owners. To mitigate the problem in your business, it always pays to invest in high-quality camera equipment that can be easily controlled and monitored to protect your company. If you don’t have a CCTV system installed, you’re leaving your business vulnerable to theft. Here’s how it could impact your company.

Finances can be impacted








Theft within the workplace, regardless of what’s being stolen, will undoubtedly have a financial implication for company owners. The cost of replacing stolen goods could reach considerable amounts and it can often bankrupt a business depending on the scale of theft. According to Blink, a security company owned by Amazon, employee theft of stolen products can cost businesses (on average) over £190 million a year across the country.

Employee fraud is also a common problem within businesses. David Davies, who wrote Fraud Watch: A Guide for Business, defined fraud as “all those activities, involving dishonesty and deception, that can drain value from a business, directly or indirectly, whether or not there is a personal gain”.

According to a KPMG Fraud Barometer, 123 cases of serious employee and manager fraud were reported and dealt with in 2009 – a record high in the 22-year history of the barometer, which initially cost UK plc around £567 million. At the time, KPMG called their findings “the tip of the iceberg”, with figures expected to rise.

According to data obtained from ActionFraud, a fraud and cyber-crime reporting centre, it was revealed at in 2017/2018, businesses reported losses of around £88 million as a result of employee fraud – a 76% rise on the year before.

Examples of employee fraud include:

  • Submitting business expense claims for personal use.
  • Putting ‘ghost’ employees on the payroll.
  • Claiming overtime for work which hasn’t been done.

A CCTV system will be able to catch any suspicious behaviour, especially when it comes to employee theft and fraud. To help prevent fraud (depending on the size of your business), you should:

  • Keep a close eye on all monetary outgoings.
  • Check that any expenses claimed have been used for the good of the company.
  • Always check the payroll to see who is on it.
  • Get to know the names of your employees (so any ‘ghosts’ can be identified easily).
  • Keep track of overtime that is being done, or ask a manager to do it on your behalf. Extra hours can easily be logged into a secure system, ensuring overtime is only paid if the work has been done.

Operations can be affected








Employee theft can cause the bankruptcy of hundreds of businesses across the UK. In order to prevent going under, companies will have difficult decisions to make, including:

  • Downsizing the company (which could include moving to another location).
  • Reducing the stock they buy.
  • Employee benefits could be cut.
  • Some employees may need to be made redundant.
  • Employees won’t be offered any pay rises.
  • Less people may be promoted to higher positions.
  • Company extension plans may have to be put on hold.
  • Resources that were once free to employees may have to be paid for by staff, or a contribution will have to be made.

In 2018/2019, over 9,835 incidents of employee theft were reported by British police, although the true figure (including cases that have gone unreported) is expected to be much higher. Despite this, the recorded figure for 2018/2019 is the lowest it’s been since 2002/2003, when 17,530 cases were reported. However, it’s imperative that figures continue to fall. To prevent the figure from rising, invest in a CCTV camera to deter potential thieves.

There are psychological implications

Employee theft, regardless of the scale it’s on, can have a serious impact on not only the business, but the people who work there. As mentioned previously, it can cause business owners to rethink strategies and save money, which could cost someone their job. Tensions can rise as a result of changes to the company which in turn affect morale.

Often, more stringent rules are put in place to prevent employee theft from occurring in the future, or as a way of catching the culprit if they remain at large. It will take a considerable amount of time for employees to get used to tighter regulations, especially if they were used to a more relaxed workplace prior to the incident. To help ease everyone in and to keep morale high, try the following things:

  • Warning employees of the changes before they’re implemented.
  • Explain why the new measurements have been put in place.
  • Reassure your employees that all new, strict rules have been put in place as a preventive measure.
  • Be understanding of how your employees feel about the new changes, whether they feel positive or negative towards it.

How to prevent employee theft and fraud

different types of cctv

Know your employees  – there are several indicators to suggest that someone may be planning to, or have the potential to commit employee theft, including:

  • Sudden need or devotion to working late or doing excessive overtime.
  • Their lifestyle is well above their level of salary.
  • Overly strong objections to financial, inventory or supply changes within the company.
  • Evidence of persistent borrowing or compulsive gambling.

It’s also recommended that small businesses in particular conduct background checks to identify past incidents of stealing or a history of employee theft. It’s also advised that any and all references are contacted.

Supervise employees – you don’t want to appear too intimidating here, so instead of watching too closely, simply view activities from the sidelines and look into things covertly, if you think anything seems  suspicious. It would also be wise to have more than one person managing the company’s finances.

Look through all receipts and invoices – whether they’re for building work you’ve just had done or a train ticket to send an employee to a conference, you need to look over the proof of your outgoings. If anything seems out of the ordinary, then it’s time to investigate. However, it’s important you don’t jump to conclusions and start accusing your staff. There could be a reasonable explanation, so take your time and approach it carefully.

Have both formal and informal audits conducted – you make unannounced internal audits as and when you feel it to be necessary. Don’t perform them too regularly and change up the months and dates you do them every year. It would also pay to have a formal annual audit carried out by an external firm, just to cover all bases.

Manage inventory and staff activity with a quality CCTV system – CCTV is highly beneficial for everyone as it can capture evidence of crime, such as theft, should you need it. The images a CCTV camera records can be used as evidence in court, helping to further strengthen your case, should it come to that. It can also aid in the protection of your employees, as many CCTV cameras act as a deterrent for people who are looking to commit a crime in the vicinity. Image quality can also help to solidly identify a perpetrator, so we recommend investing in a state-of-the-art system to help protect both your business and your employees.

Provide a safe, confidential way for employees to report fraud and theft – it’s important that you make your employees feel safe and comfortable when reporting allegations of fraud and theft within the company. Instead of making it a huge, pivotal event for the business, quietly make your employees aware that there’s a place they can report those incidents in complete confidence – it will also help to build a rapport with them, making it more likely that they will report something, should theft or fraud occur.


Caught On Camera are leading suppliers and installers of CCTV security systems throughout Essex, London, Epping, Barnet, Cambridge and the south east region. We understand the importance of protecting your business, including your staff and inventory, that’s why we provide high-quality, bespoke commercial CCTV systems to cater for every need and budget. For more information about the products we supply and the services we offer, including CCTV installation and maintenance, contact a member of our friendly team today – we’ll be happy to help.