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Theft by employees rises as cost of living bites

Hard-up staff are increasingly stealing from their employers to make ends meet, according to new data released by insurer, Zurich.

From a Freedom of Information request to the 43 police forces in England and Wales, the firm found nearly 6,000 staff were caught stealing from their employer last year, up by a fifth from the 5,000 incidents recorded during 2021.

This level of crime means 500 employees are being caught stealing every month, although because the data only shows recorded crime, the actual level of undetected thieving is likely to be far higher.

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London had the largest number of employee thefts at 874 incidents, a rise of 32% on the year before.

The largest percentage rise in thefts was recorded in Lincolnshire, where incidents rose by 44%.

In only eight areas, including Durham, Warwickshire, Northamptonshire and Staffordshire, was there a fall in employee crime rates.

Although the range of thefts is wide, from petty theft of office supplies, to embezzlement of company funds, commentators claim the rise in criminal activity is linked to the current cost of living crisis.

Speaking to HR magazine Rose Sutton, a senior speciality lines claims expert at Zurich, said: “From our own experience, we know that crime typically rises during periods of financial distress. The increase in employee theft at this time would suggest the cost of living crisis is one of the key drivers.

“Given employee theft is difficult to determine, its true prevalence is likely to be higher than the figures show.”

But Lee Ashwood, employment director at national law firm Freeths, said the data highlights how a broader conversation is needed around employee theft, and whether managers should in these circumstances be either sympathetic or strict with staff.

Speaking to HR magazine he said: “Employers will probably need to be prepared for the fact that people might cite the cost of living as a mitigating circumstance.

"This won’t necessarily change anything from a legal point of view, but it does throw up issues around how the employer will want to be seen by the rest of the workforce. Do they want to be seen as uncaring?”

He said HR directors should not worry that taking a softer approach might set a precedent and encourage others to steal.

He added: “If you review things on a case-by-case basis, there shouldn’t be concern that others might think they can do the same and get away with it.

“As with all these issues, it’s also about proper procedure. Often the first reaction of employers is that the employee should be sacked. But for a decision to be reasonable, managers need to consider all of the circumstances, including length of service, disciplinary record, whether they have confessed, whether they have show remorse, and whether they can be trusted in the future.”

Sutton added: “While the cost of living is a cause of significant financial anxiety, employee theft is still illegal, as well as being a breach of employer trust. During these difficult times it’s particularly important employers listen to their staff and provide targeted support where they can.”

Proportionately, with nearly 900 incidents and a population of 9 million, London had less crime per head than other areas.

When measured on an incident per-100,000 people of working age basis, London does not appear on the top five list of places for crime.

Northamptonshire had the highest employee crime rate of 43.4 per 100,000 while West Mercia has the lowest level of crime rate at 13.7.

Dylan Jones, CEO of Income & Expenditure Hub, said: "We're not surprised, but saddened at the increase in workplace theft for small items and essentials as recently reported by Zurich. We know from our own research that people of all ages are struggling financially due to the cost of living crisis."

Zurich confirmed that it has also seen a rise in commercial crime claims, with recent crimes including a £150,000 theft by a ring of employees at a food manufacturer and a £50,000 claim from a double-glazing firm defrauded by its finance manager.

In one of the worst cases of employee theft, in 2020 admin manager, Amanda Rees, was sentenced to more than five years in jail after stealing nearly £1 million over the course of six years. She had full access to her company’s bank accounts.

In the US the Association of Certified Fraud Examiners estimates businesses lose 5% of their annual revenue to employee fraud and abuse.