Reduce Employee Theft with a Solid Loss Prevention Strategy

Employee Theft Reaches 48%
Makes Up Largest Percentage of Shrinkage

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The latest National Retail Security Survey reports that losses from employee theft have reached record levels and that total inventory shrinkage cost U.S. retailers $31.3 billion last year including $15 billion or a staggering 48% from employee theft. The employee theft figure is the highest in the 10 year history of the survey.

According to University of Florida criminologist Richard C. Hollinger, Ph.D., who directs the National Retail Security Survey, the results indicate that in 2002, retailers lost 1.75 percent of their total annual sales to shrink, up from 1.69 percent the prior year. Hollinger said that the results of the survey should serve as a wake-up call to the retail industry that shrinkage, and employee theft in particular, continues to be a multi-billion dollar source of revenue loss.

Where Inventory Shrinkage Happens

Employee Theft 48%
Shoplifting 32%
Administrative Error 15%
Vendor Fraud 5%

The study, conducted by the University of Florida with a funding grant from ADT Security Services, Inc., a unit of Tyco Fire and Security Services, discovered that retail security managers attributed more than 48 percent of their losses to the thefts of disgruntled workers. In comparison, 32 percent of retail losses were the result of shoplifters. Employee theft was up 2 percentage points from the previous study.

Internal theft now costs U.S. retailers $15 billion annually, compared to shoplifting costs of $10 billion. Employee theft and shoplifting combined account for the largest source of property crime committed annually in the United States. In fact, the average dollar loss per employee theft was $1341.02 vs. $207.18 per shoplifting incident.

The remainder of the annual retail losses are due to paperwork errors at 15 percent and theft by vendors at 5 percent, according to the data obtained by analyzing theft incidents from 118 of the largest U.S. retail chains in 22 different retail markets.

"Given that the surveyed portion of the retail economy annually transacts over $1.845 trillion dollars, this percentage of loss is worth over $32 billion," Hollinger said. "This means that the single largest category of larceny in the United States is the crime that occurs in retail stores. This figure is larger than motor vehicle theft, bank robbery or household burglary combined."

What can retailers do to deter or stop employee theft?

"In today's environment of heightened awareness about increased security measures it's becoming increasingly important for retailers to address the security lapses that allow these kinds of losses. In the end, it is the consumers who will have to pay the price for shrinkage in the form of higher retail prices," Hollinger concluded.

Proven resources to help you prevent or stop employee theft

Team KEO Solutions and Profiles International offer proven resources to assist you with five of the six major recommendations to deterring employee theft.

Pre-employment screening with The Step One Survey II is an employer's first step in evaluating a job candidate’s qualifications for employment. It should be an integral part of your overall employee theft prevention system.

It has two parts, the first being a direct-admissions structured interview format that asks about recent work history, record of honesty, drug/alcohol use and related issues. The results of this "interview" are assessed by the company to evaluate the candidate's suitability for employment. The second part of the Step One Survey II assesses the candidate’s attitudes toward integrity, substance abuse, reliability, and work ethic. You will reduce opportunities for employee theft and promote a theft free culture by hiring employees with the appropriate attitudes.

The Step One Survey II helps eliminate these profit stealing behaviors and belongs in your candidate assessment system:

Unexcused absences
Tardiness
Unuthorized use of the Internet
Using company email for personal use
Discosing private and restricted computer data
Theft of office supplies and other company property
Clocking in or out for other employees
Inventory shrinkage
Revealing confidential information and/or trade secrets to outsiders
Drug use
Sub-par job performance
Carelessness
Fraud
Job hopping

See a sample report by clicking here.

See what some of our clients have to say about Profiles Assessments.

Call 800-888-208-6690 or email us for more information and a complimentary initial consultation.

Team KEO Solutions also offers:

Employee background check and drug screening resources through Team KEO Solutions you prevent or stop employee theft. Background checks should be an integral part of your overall employee theft prevention system including:

General Information Reports
Driving Record Reports
Workers' Compensation Reports
Credit Reports
Criminal History Reports
Education Verification Reports
In-Depth Reports
Rush Services
Custom Service

Improve job satisfaction levels of your employees by matching the right person with the right job. The Profile XT™ is a "Total person" assessment with many valuable uses. It measures the job-related qualities that make a person productive - Thinking and Reasoning Style, Behavioral Traits, and most importantly for job satisfaction - Occupational Interests.

The Profile XT is a perfect follow up to the Step One Survey II. Our clients tell us The Profile XT is three to five times more effective than any other assessment they have used.

See sample reports by clicking here.

Why choose Team KEO Solutions and Profiles International?

Trusted Tools: Through Team KEO and Profiles International more than 35,000 companies currently rely on Profile's employee assessment tools for selection, coaching, succession planning and maximizing human capital. The more you know about your people, the better you can impact both your top and bottom lines.

Our tools are designed for use exclusively in the workplace. Our assessment reports provide extensive and invaluable information that will predict reliability, substance abuse, work ethic, thinking and learning styles, occupational interests, desired skills and much more.

Researched and Tested: Profiles personnel assessments are tested. Each has passed rigorous reliability and validity tests. These are not personality tests. Each was developed exclusively for use in workplace settings. Profiles assessments also feature the exclusive JobFit™ feature allowing you to match a candidate or employee to a specific pattern for your position.

Easier and more affordable than you may think: We offer custom pricing plans designed to meet any business' budget. In addition, your Virtual Employee Assessment Center offers you an easy to use Internet assessment capability with instant reporting. We can have you set up and trained today. You will be employee testing tomorrow. In depth training is also available to all our clients to insure you gain the maximum benefit from the investment being made in your employees.

See what some of our clients have to say about Profiles International Assessments.

Call 800-888-208-6690 or email us for more information and a complimentary initial consultation.