Green industry firms are at risk for employee fraud and theft |
Written by Troy D. Sibelius, FASLA, CIC, CRM |
Tuesday, May 07, 2019 02:00 AM |
Who is stealing your stuff? And more importantly, who is stealing your stuff bit by bit by bit that you may not even be aware of? In 2016, according to various national insurance carriers and national public resources on employee theft, the industry with the highest targeted sector for employee theft was the financial services sector at 18 percent. Real estate/construction sector came in at fourth place with 10 percent of total cases reported. No industry is immune from employee theft. In fact, 55 percent of cases reported in 2016 were from companies with fewer than 100 employees. The average age of the perpetrators was 48 years old. The construction industry trend sees that more theft cases are coming from management and supervisory levels. These folks are much more likely to steal than other employees. While check fraud and direct funds theft are the most common, check fraud was responsible for 3.5 times higher losses than funds theft.According to Hiscox Insurance, the median cost of an employee theft claim in 2016 for the construction industry was $353,805. This seems like a huge sum, but often these schemes are carried out for many years by someone who handles money and whom the employer feels is trustworthy. The most common remark from business owners is: “Why didn’t I see this sooner?” Who wants to suspect someone who’s worked with you for years and appears trustworthy and loyal? Nevertheless, owners and managers should pay attention to typical warning signs that include: Intelligence and curiosity. They pick up things quickly and are eager to learn how everything works in the office. Once they know, they manipulate for their own gain.
Almost 30 percent of employee theft schemes persist for more than five years, and the most long-running schemes typically involve employees who are often left to work alone and don’t have someone watching over them on a consistent basis. These conditions create opportunity. As a precaution, do you have your financials audited by a third-party accountant every year? If not, you should. Do you keep careful records of your inventory? If not, you should. Case study of plant theft Inside the building
Troy D. Sibelius, FASLA, CIC, CRM, is an executive vice president and client adviser at The Buckner Company. Acknowledgement: Special thanks to Doug Karppat Hiscox Insurance for providing much of this information in their 2017 Embezzlement Study. This article originally appeared in the January/February 2019 issue of Colorado Green. Read more in this issue of Colorado Green NOW: |